Federal Register: October 23, 2009 (Volume 74, Number 204)
DOCID: fr23oc09-84 FR Doc E9-25482
SECURITIES AND EXCHANGE COMMISSION
Securities and Exchange Commission
NOTICE: NOTICES
DOCID: fr23oc09-84
SUBJECT CATEGORY:
Proposed Collection; Comment Request
DOCUMENT SUMMARY:
Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 205490213.
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'') 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 for extension and approval.
Rule 15c34 (17 CFR 240.15c34) (the ``Rule'') under the Securities Exchange Act of 1934 (17 U.S.C. 78a et seq.) (the ``Exchange Act'') requires certain brokerdealers 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.
[[Page 54861]]
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. 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 that the total annualized burden associated with Rule 15c34
for five OTC derivatives dealers will be approximately 1,567 hours annually.\1\
\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.
The staff believes that the cost of complying with Rule 15c34 will
be approximately $258 per hour.\2\ This per hour cost is based upon the
annual average hourly salary for a compliance manager, who would
generally be responsible for initially establishing, documenting, and
maintaining an OTC derivatives dealer's internal risk management
control system. Accordingly, the total annualized cost for all affected OTC derivatives dealers is estimated to be $404,200.\3\
\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 1800
hour workyear and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead.
\3\ 1,567 hours x $258 = $404,200.
Written comments are invited on: (a) Whether the proposed 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 email to: PRA_Mailbox@sec.gov.
Dated: October 19, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E925482 Filed 102209; 8:45 am]
BILLING CODE 801101P
SUMMARY:
Agency Information Collection Activities; Proposals, Submissions, and Approvals
DOCUMENT BODY 2:
Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 205490213.
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'') 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 for extension and approval.
Rule 15c34 (17 CFR 240.15c34) (the ``Rule'') under the Securities Exchange Act of 1934 (17 U.S.C. 78a et seq.) (the ``Exchange Act'') requires certain brokerdealers 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.
[[Page 54861]]
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. 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 that the total annualized burden associated with Rule 15c34
for five OTC derivatives dealers will be approximately 1,567 hours annually.\1\
\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.
The staff believes that the cost of complying with Rule 15c34 will
be approximately $258 per hour.\2\ This per hour cost is based upon the
annual average hourly salary for a compliance manager, who would
generally be responsible for initially establishing, documenting, and
maintaining an OTC derivatives dealer's internal risk management
control system. Accordingly, the total annualized cost for all affected OTC derivatives dealers is estimated to be $404,200.\3\
\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 1800
hour workyear and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead.
\3\ 1,567 hours x $258 = $404,200.
Written comments are invited on: (a) Whether the proposed 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 email to: PRA_Mailbox@sec.gov.
Dated: October 19, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E925482 Filed 102209; 8:45 am]
BILLING CODE 801101P