

[Federal Register: November 8, 2006 (Volume 71, Number 216)]
[Notices]               
[Page 65549-65550]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08no06-120]                         

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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 17i-6; SEC File No. 270-532; OMB Control No. 3235-0588.

    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.
    Section 231 of the Gramm-Leach-Bliley Act of 1999 \1\ (the 
``GLBA'') amended Section 17 of the Securities Exchange Act of 1934 (15 
U.S.C. 78a et seq.) (the ``Act'' or the ``Exchange Act'') to create a 
regulatory framework under which a holding company of a broker-dealer 
(``investment bank holding company'' or ``IBHC'') may voluntarily be 
supervised by the Commission as a supervised investment bank holding 
company (or ``SIBHC'').\2\ In 2004, the Commission promulgated rules, 
including Rule 17i-6, (17 CFR 240.17i-6) to create a framework for the 
Commission to supervise SIBHCs.\3\ This framework includes 
qualification criteria for SIBHCs, as well as recordkeeping and 
reporting requirements. Among other things, this regulatory framework 
for SIBHCs is intended to provide a basis for non-U.S. financial 
regulators to treat the Commission as the principal U.S. consolidated, 
home-country supervisor for SIBHCs and their affiliated broker-
dealers.\4\
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    \1\ Pub. L. 106-102, 113 Stat. 1338 (1999).
    \2\ See 15 U.S.C. 78q(i).
    \3\ See Exchange Act Release No. 49831 (Jun. 8, 2004), 69 FR 
34472 (Jun. 21, 2004).
    \4\ See H.R. Conf. Rep. No. 106-434, 165 (1999). See also 
Exchange Act Release No. 49831, at 6 (Jun. 8, 2004), 69 FR 34472, at 
34473 (Jun. 21, 2004).
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    Pursuant to Section 17(i)(3)(A) of the Exchange Act, an SIBHC must 
make and keep records, furnish copies thereof, and make such reports as 
the Commission may require by rule.\5\ Rule 17i-6 requires that an 
SIBHC file with the Commission certain monthly and quarterly reports 
and an annual audit report.
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    \5\ 15 U.S.C. 78q(i)(3)(A).
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    The collections of information required by Rule 17i-6 are necessary 
to allow the Commission to adequately supervise the activities of these 
SIBHCs and to effectively determine whether supervision of an IBHC as 
an SIBHC is necessary or appropriate in furtherance of the purposes of 
Section 17 of the Act. Rule 17i-6 also enhances the Commission's 
supervision of an SIBHCs' subsidiary broker-dealers through collection 
of additional information and inspections of affiliates of those 
broker-dealers. Without these reports, the Commission would be unable 
to adequately supervise an SIBHC, nor would it be able to determine 
whether continued supervision of an IBHC as an SIBHC were necessary and 
appropriate in furtherance of the purposes of Section 17 of the Act.
    We estimate that three IBHCs will file Notices of Intention with 
the Commission to be supervised by the Commission as SIBHCs. An SIBHC 
will require about eight hours each month to prepare and file the 
monthly reports required by this rule (or approximately 96 hours per 
year).\6\ On average, it will take an SIBHC about 16 hours each quarter 
(or 64 hours each year) \7\ to prepare and file the quarterly reports 
required by this rule. An SIBHC will require about 200 hours to prepare 
and file the annual audit reports required by this rule. Consequently, 
the total annual burden of Rule 17i-6 on all SIBHCs is approximately 
1,080 hours.\8\
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    \6\ (8 hours x 12 months in a year) = 96 hours/year.
    \7\ (16 hours x 4 quarters in a year) = 64 hours/year.
    \8\ (96 hours per year to prepare and file monthly reports + 64 
hours each year to prepare and file quarterly reports + 200 hours 
each year to prepare and file annual audit reports) x 3 SIBHCs = 
1,080 hours.
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    We believe that an IBHC likely will upgrade its information 
technology (``IT'') systems in order to more efficiently comply with 
certain of the SIBHC framework rules (including Rules 17i-4, 17i-5, 
17i-6 and 17i-7), and that this would be a one-time cost. Depending on 
the state of development of the IBHC's IT systems, it would cost an 
IBHC between $1 million and $10 million to upgrade its IT systems to 
comply with the SIBHC framework of rules. Thus, on average, it would 
cost each of the three IBHCs about $5.5 million to upgrade their IT 
systems, or approximately $16.5 million in total. It is impossible to 
determine what percentage of the IT systems costs would be attributable 
to each Rule, so we allocated the total estimated upgrade costs equally 
(at 25% for each of the above-mentioned Rules), with $4,125,000 
attributable to Rule 17i-6.
    The reports and notices required to be filed pursuant to Rule 17i-6 
must be

[[Page 65550]]

preserved for a period of not less than three years.\9\ The collection 
of information is mandatory and the information required to be provided 
to the Commission pursuant to this Rule is deemed confidential pursuant 
to Section 17(j) of the Exchange Act and Section 552(b)(3)(B) of the 
Freedom of Information Act,\10\ notwithstanding any other provision of 
law. In addition, paragraph 17i-6(h) specifies that all reports and 
statements filed by an SIBHC in accordance with Rule 17i-6 shall be 
accorded confidential treatment.
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    \9\ 17 CFR 240.17i-5(b)(3).
    \10\ 5 U.S.C. 552(b)(3)(B).
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    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 
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; and (ii) R. Corey Booth, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Shirley 
Martinson, 6432 General Green Way, Alexandria, VA 22312 or send an e-
mail to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 
30 days of this notice.

    October 23, 2006.
Nancy M. Morris,
Secretary.
[FR Doc. E6-18794 Filed 11-7-06; 8:45 am]

BILLING CODE 8011-01-P
