
[Federal Register: October 23, 2009 (Volume 74, Number 204)]
[
Notices]               
[Page 54862]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr23oc09-86]                         

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SECURITIES AND EXCHANGE COMMISSION



 
Proposed Collection; Comment Request



Upon Written Request, Copies Available From: U.S. Securities and 

Exchange Commission, Office of Investor Education and Advocacy, 

Washington, DC 20549-0213.



Extension: 

    Rule 17i-4, SEC File No. 270-530, OMB Control No. 3235-0594.



    Notice is hereby given that pursuant to the Paperwork Reduction Act 

of 1995 \1\ the Securities and Exchange Commission (``Commission'') has 

submitted to the Office of Management and Budget requests for extension 

of the previously approved collections of information discussed below. 

The Code of Federal Regulations citation to this collection of 

information is the following: 17 CFR 240.17i-4.

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    \1\ 44 U.S.C. 3501 et seq.

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    Section 231 of the Gramm-Leach-Bliley Act of 1999 \2\ (the 

``GLBA'') amended Section 17 of the Securities Exchange Act of 1934 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'').\3\ In 2004, the Commission 

promulgated rules, including Rule 17i-4, to create a framework for the 

Commission to supervise SIBHCs.\4\ 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.\5\

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    \2\ Public Law No. 106-102, 113 Stat. 1338 (1999).

    \3\ See 15 U.S.C. 78q(i).

    \4\ See Exchange Act Release No. 49831 (Jun. 8, 2004), 69 FR 

34472 (Jun. 21, 2004).

    \5\ 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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    Rule 17i-4 requires an SIBHC to comply with present Exchange Act 

Rule 15c3-4 \6\ as though it were a broker-dealer, which requires that 

the firm establish, document and maintain a system of internal risk 

management controls to assist it in managing the risks associated with 

its business activities (including market, credit, operational, 

funding, and legal risks). In addition, Rule 17i-4 requires that an 

SIBHC establish, document, and maintain procedures for the detection 

and prevention of money laundering and terrorist financing as part of 

its internal risk management control system. Finally, Rule 17i-4 

requires that an SIBHC periodically review its internal risk management 

control system for integrity of the risk measurement, monitoring, and 

management process, and accountability, at the appropriate 

organizational level, for defining the permitted scope of activity and 

level of risk. The records required to be created pursuant to Rule 17i-

4 must be preserved for a period of not less than three years.\7\

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    \6\ 17 CFR 240.15c3-4.

    \7\ 17 CFR 240.17i-5(b)(5).

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    The collection of information required pursuant to Rule 17i-4 is 

needed so that the Commission can adequately supervise the activities 

of these SIBHCs, and to allow the Commission 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. Without this 

information, the Commission would be unable to adequately supervise the 

SIBHC as provided for under the Exchange 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, on average, about 3,600 hours to assess its present 

structure, businesses, and controls, and establish and document its 

risk management control system. In addition, an SIBHC will require, on 

average, approximately 250 hours each year to maintain its risk 

management control system. Consequently, the total initial burden for 

all SIBHCs is approximately 10,800 hours \8\ and the continuing annual 

burden is about 750 hours.\9\ Thus, the total burden relating to Rule 

17i-4 for all SIBHCs is approximately 11,550 hours \10\ in the first 

year, and approximately 750 hours each year thereafter.\11\

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    \8\ (3,600 hours x 3 SIBHCs) = 10,800 hours.

    \9\ (250 hours per year x 3 SIBHCs) = 750 hours per year.

    \10\ (3,600 hours x 3 SIBHCs) + (250 hours per year x 3 SIBHCs.)

    \11\ (250 hours per year x 3 SIBHCs).

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    We believe that an IBHC likely would 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 SIBHCs 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-5.

    Written comments are invited on: (a) Whether the 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.



     October 19, 2009.

Florence E. Harmon,

Deputy Secretary.

[FR Doc. E9-25485 Filed 10-22-09; 8:45 am]

BILLING CODE 8011-01-P
