
[Federal Register Volume 77, Number 175 (Monday, September 10, 2012)]
[Notices]
[Pages 55512-55513]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-22144]


-----------------------------------------------------------------------

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:
    Regulation S-P, SEC File No. 270-480, OMB Control No. 3235-0537.

    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 approval of extension of the previously approved collection 
of information provided for in the privacy notice and opt out notice 
provisions of Regulation S-P--Privacy of Consumer Financial Information 
(17 CFR part 248) under the Securities Exchange Act of 1934 (15 U.S.C. 
78a et seq.) (``Exchange Act''). The Commission plans to submit this 
existing collection of information to the Office of Management and 
Budget for extension and approval.
    The privacy notice and opt out notice provisions of Regulation S-P 
(the ``Rule'') implement the privacy notice and opt out notice 
requirements of Title V of the Gramm-Leach-Bliley Act (``GLBA''), which 
include the requirement that at the time of establishing a customer 
relationship with a consumer and not less than annually during the 
continuation of such relationship, a financial institution

[[Page 55513]]

shall provide a clear and conspicuous disclosure to such consumer of 
such financial institution's policies and practices with respect to 
disclosing nonpublic personal information to affiliates and 
nonaffiliated third parties (``privacy notice''). Title V of the GLBA 
also provides that, unless an exception applies, a financial 
institution may not disclose nonpublic personal information of a 
consumer to a nonaffiliated third party unless the financial 
institution clearly and conspicuously discloses to the consumer that 
such information may be disclosed to such third party; the consumer is 
given the opportunity, before the time that such information is 
initially disclosed, to direct that such information not be disclosed 
to such third party; and the consumer is given an explanation of how 
the consumer can exercise that nondisclosure option (``opt out 
notice''). The Rule applies to broker-dealers, investment advisers 
registered with the Commission, and investment companies (``covered 
entities'').
    Commission staff estimates that, as of early May, 2012, the Rule's 
information collection burden applies to approximately 21,500 covered 
entities (approximately 4,700 broker-dealers, 12,600 investment 
advisers registered with the Commission, and 4,200 investment 
companies). In view of (a) the minimal recordkeeping burden imposed by 
the Rule (since the Rule has no recordkeeping requirement and records 
relating to customer communications already must be made and retained 
pursuant to other SEC rules); (b) the summary fashion in which 
information must be provided to customers in the privacy and opt out 
notices required by the Rule (the model privacy form adopted by the SEC 
and the other agencies in 2009, designed to serve as both a privacy 
notice and an opt out notice, is only two pages); (c) the availability 
to covered entities of the model privacy form and online model privacy 
form builder; and (d) the experience of covered entities' staff with 
the notices, SEC staff estimates that covered entities will each spend 
an average of approximately 12 hours per year complying with the Rule, 
for a total of approximately 258,000 annual burden-hours (12 x 21,500 = 
258,000). SEC staff understands that the vast majority of covered 
entities deliver their privacy and opt out notices with other 
communications such as account opening documents and account 
statements. Because the other communications are already delivered to 
consumers, adding a brief privacy and opt out notice should not result 
in added costs for processing or for postage and materials. Also, 
privacy and opt out notices may be delivered electronically to 
consumers who have agreed to electronic communications, which further 
reduces the costs of delivery. Because SEC staff assumes that most 
paper copies of privacy and opt out notices are combined with other 
required mailings, the burden-hour estimates above are based on 
resources required to integrate the privacy and opt out notices into 
another mailing, rather than on the resources required to create and 
send a separate mailing. SEC staff estimates that, of the estimated 12 
annual burden-hours incurred, approximately 8 hours would be spent by 
administrative assistants at an hourly rate of $65, and approximately 4 
hours would be spent by internal counsel at an hourly rate of $378, for 
a total annualized cost of $2,032 for each of the covered entities (8 x 
$65 = $520; 4 x $378 = $1,512; $520 + $1,512 = $2,032). Hourly cost 
estimates for personnel time are derived from the Securities Industry 
and Financial Markets Association's Management & Professional Earnings 
in the Securities Industry 2011, modified by SEC staff to account for 
an 1800-hour work-year and multiplied by 5.35 to account for bonuses, 
firm size, employee benefits, and overhead. Accordingly, SEC staff 
estimates that the total annualized cost for the estimated total hour 
burden for the approximately 21,500 covered entities subject to the 
Rule is approximately $43,688,000 ($2,032 x 21,500 = $43,688,000).
    Written comments are invited on: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
shall have practical utility; (b) the accuracy of the Commission's 
estimates of the burden of the proposed collection of information on 
respondents; (c) ways to enhance the quality, utility, and clarity of 
the information to be 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.
    The Commission may not conduct or sponsor a collection of 
information unless it displays a currently valid control number. No 
person shall be subject to any penalty for failing to comply with a 
collection of information subject to the PRA that does not display a 
valid Office of Management and Budget (OMB) control number.
    Background documentation for this information collection may be 
viewed at the following Web site: www.reginfo.gov. 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: Shagufta_Ahmed@omb.eop.gov; and (ii) Thomas Bayer, Director/Chief Information 
Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 
6432 General Green Way, Alexandria, VA 22312, or by sending an email 
to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 
days of this notice.

    Dated: September 4, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-22144 Filed 9-7-12; 8:45 am]
BILLING CODE 8011-01-P


