
[Federal Register Volume 75, Number 4 (Thursday, January 7, 2010)]
[Notices]
[Pages 1003-1004]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: X10-320107]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; 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 request for extension 
of the

[[Page 1004]]

previously approved collection of information discussed below. The Code 
of Federal Regulation citation to this collection of information is the 
following rule: 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 (17 
USC 78a et seq.) (``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'').\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 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.
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    \6\ 17 CFR 240.15c3-4.
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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 Exchange 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 \7\ and the continuing annual 
burden is about 750 hours.\8\ Thus, the total burden relating to Rule 
17i-4 for all SIBHCs is approximately 11,550 hours \9\ in the first 
year, and approximately 750 hours each year thereafter.\10\
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    \7\ (3,600 hours x 3 SIBHCs) = 10,800 hours.
    \8\ (250 hours per year x 3 SIBHCs) = 750 hours per year.
    \9\ (3,600 hours x 3 SIBHCs) + (250 hours per year x 3 SIBHCs).
    \10\ (250 hours per year x 3 SIBHCs).
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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-4.
    The records required to be created pursuant to Rule 17i-4 must be 
preserved for a period of not less than three years.\11\ 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,\12\ notwithstanding any other provision of 
law.
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    \11\ 17 CFR 240.17i-5(b)(5).
    \12\ 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) 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: 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. 2010-4 Filed 1-6-10; 8:45 am]
BILLING CODE 8011-01-P


