
[Federal Register Volume 75, Number 4 (Thursday, January 7, 2010)]
[Notices]
[Page 1002]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: X10-300107]


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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 Investor Education and Advocacy, Washington, DC 
20549-0213.

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 (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.
    The staff estimates that 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, an 
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 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 an 
annual average hourly salary for a compliance manager who would be 
responsible for ensuring compliance with the requirements of Rule 15c3-
4. 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 1,800-
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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    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) 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 email to: (i) 
Shagufta_Ahmed@comb.eop.gov; and (ii) 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. Comments must be submitted to OMB 
within 30 days of this notice.

    Dated: December 30, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. 2010-2 Filed 1-6-10; 8:45 am]
BILLING CODE 8011-01-P


