
[Federal Register Volume 78, Number 1 (Wednesday, January 2, 2013)]
[Notices]
[Page 128]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-31466]


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SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; 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; OMB Control No. 3235-0497, SEC File No. 270-
441.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 (44 U.S.C. 3501 et seq.) (the ``Paperwork Reduction Act''), the 
Securities and Exchange Commission (the ``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 (``OMB'') for extension and 
approval.
    Rule 15c3-4 (17 CFR 240.15c3-4) (the ``Rule'') under the Securities 
Exchange Act of 1934 (15 U.S.C. 78a et seq.) (the ``Exchange Act'') 
requires certain broker-dealers that are registered with the Commission 
as OTC derivatives dealers, or who compute their net capital charges 
under Appendix E to Rule 15c3-1 (17 CFR 240.15c3-1) (``ANC firms''), to 
establish, document, and maintain a system of internal risk management 
controls. The Rule sets forth the basic elements for an OTC derivatives 
dealer or an ANC firm 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 or an ANC firm'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 or an ANC firm must periodically review, in 
accordance with written procedures, the firm's business activities for 
consistency with its risk management guidelines.
    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.\1\ Currently, four firms are registered with 
the Commission as OTC derivatives dealers. The staff estimates that 
approximately four additional OTC derivatives dealers may become 
registered within the next three years. Thus, the estimated annualized 
burden would be 800 hours for the four OTC derivatives dealers 
currently registered with the Commission to maintain their risk 
management control systems,\2\ 2,666 hours for the four new OTC 
derivatives dealers to establish and document their risk management 
control systems,\3\ and 400 hours for the four new OTC derivatives 
dealers to maintain their risk management control systems.\4\ 
Accordingly, the staff estimates the total annualized burden associated 
with Rule 15c3-4 for the eight OTC derivatives dealers will be 
approximately 3,866 hours annually.
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    \1\ This notice does not cover the hour burden associated with 
ANC firms, because the hour burden for ANC firms is included in the 
Paperwork Reduction Act collection for Rule 15c3-1, which requires 
ANC firms to comply with specific provisions of Rule 15c3-4 in 
Appendix E to Rule 15c3-1. See 17 CFR 240.15c3-1(a)(7)(iii), 17 CFR 
240.15c3-1e(a)(1)(ii), and 17 CFR 240.15c3-1e(a)(1)(viii)(C).
    \2\ (200 hours x 4 firms) = 800.
    \3\ (2000 hours x 1.333 firms) = 2,666.
    \4\ (200 hours x 4 firms x/2) = 400 {the number is divided by 
two to show an average, since it is assumed that the four new OTC 
derivatives dealers will register in even intervals over the three 
years{time} .
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    The staff believes that the cost of complying with Rule 15c3-4 will 
be approximately $279 per hour.\5\ 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 $1,078,614.\6\
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    \5\ The $279 per hour salary figure for a compliance manager is 
from SIFMA's Management & Professional Earnings in the Securities 
Industry 2011, 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.
    \6\ 3,866 hours x $279 per hour = $1,078,614.
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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 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; (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.
    The Commission may not conduct or sponsor a collection of 
information unless it displays a currently valid OMB control number. No 
person shall be subject to any penalty for failing to comply with a 
collection of information subject to the Paperwork Reduction Act that 
does not display a valid OMB control number.
    Comments should be directed to Thomas Bayer, Director/Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 6432 General Green Way, Alexandria, Virginia 22312 or 
send an email to: PRA_Mailbox@sec.gov.

    Dated: December 26, 2012.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2012-31466 Filed 12-31-12; 8:45 am]
BILLING CODE 8011-01-P


