
[Federal Register: October 23, 2009 (Volume 74, Number 204)]
[
Notices]               
[Page 54860-54861]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23oc09-84]                         

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SECURITIES AND EXCHANGE COMMISSION



[Rule 15c3-4; SEC File No. 270-441; OMB Control No. 3235-0497]



 
Proposed Collection; Comment Request



Upon Written Request, Copies Available From: Securities and Exchange 

Commission, Office of Investor Education and Advocacy, Washington, DC 

20549-0213.



    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 (17 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.



[[Page 54861]]



    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. Currently, four firms are registered with 

the Commission as OTC derivatives dealers. The staff estimates that 

approximately one additional OTC derivatives dealer may become 

registered within the next three years. Accordingly, the staff 

estimates that the total annualized burden associated with Rule 15c3-4 

for five OTC derivatives dealers will be approximately 1,567 hours 

annually.\1\

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    \1\ ((One new OTC derivatives dealer x 2,000 hours to establish 

and document its internal risk management control system) + (One new 

OTC derivatives dealer x 200 hours to maintain an internal risk 

management control system x (3 years/2)) + (Four registered OTC 

derivatives dealers x 200 hours to maintain an internal risk 

management control system x 3 years))/3 years = 1,567 hours.

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    The staff believes that the cost of complying with Rule 15c3-4 will 

be approximately $258 per hour.\2\ 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. Accordingly, the total annualized cost for all affected 

OTC derivatives dealers is estimated to be $404,200.\3\

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    \2\ The $258 per hour salary figure for a Compliance Manager is 

from SIFMA's Management & Professional Earnings in the Securities 

Industry 2008, 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.

    \3\ 1,567 hours x $258 = $404,200.

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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 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.

    Comments should be directed to Charles Boucher, 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.



    Dated: October 19, 2009.

Florence E. Harmon,

Deputy Secretary.

[FR Doc. E9-25482 Filed 10-22-09; 8:45 am]

BILLING CODE 8011-01-P
