[Federal Register Volume 74, Number 204 (Friday, October 23, 2009)]
[Notices]
[Pages 54860-54861]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-25482]


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SECURITIES AND EXCHANGE COMMISSION

[Rule 15c3-4; SEC File No. 270-441; OMB Control No. 3235-0497]


Proposed Collection; Comment Request

Upon Written Request, Copies Available From: Securities and Exchange 
Commission, Office of Investor Education and Advocacy, Washington, DC 
20549-0213.

    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 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.

[[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 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 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\
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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 1800-
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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    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 e-mail to: [email protected].

    Dated: October 19, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-25482 Filed 10-22-09; 8:45 am]
BILLING CODE 8011-01-P