[Federal Register Volume 84, Number 142 (Wednesday, July 24, 2019)]
[Notices]
[Pages 35701-35702]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-15695]
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SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of FOIA Services, 100 F Street NE, Washington, DC
20549-2736
Extension:
Rule 17a-4, SEC File No. 270-198, OMB Control No. 3235-0279.
Notice is hereby given that pursuant to the Paperwork Reduction Act
of 1995 (``PRA'') (44 U.S.C. 3501 et seq.), the Securities and Exchange
Commission (``Commission'') is soliciting comments on the collection of
information provided for in Rule 17a-4 (17 CFR 240.17a-4), under the
Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). The Commission
plans to submit this existing collection of information to the Office
of Management and Budget (``OMB'') for extension and approval.
Rule 17a-4 requires exchange members, brokers, and dealers
(``broker-dealers'') to preserve for prescribed periods of time certain
records required to be made by Rule 17a-3. In addition, Rule 17a-4
requires the preservation of records required to be made by other
Commission rules and other kinds of records which firms make or receive
in the ordinary course of business. These include, but are not limited
to, bank statements, cancelled checks, bills receivable and payable,
originals of communications, and descriptions of various transactions.
Rule 17a-4 also permits broker-dealers to employ, under certain
conditions, electronic storage media to maintain records required to be
maintained under Rules 17a-3 and 17a-4.
There are approximately 3,764 active, registered broker-dealers.
The staff estimates that the average amount of time necessary to
preserve the books and records as required by Rule 17a-4 is 254 hours
per broker-dealer per year. Additionally, the Commission estimates that
paragraph (b)(11) of Rule 17a-4 imposes an annual burden of 3 hours per
year to maintain the requisite records. The Commission estimates that
there are approximately 200 internal broker-dealer systems, resulting
in an annual recordkeeping burden of 600 hours. Therefore, the
Commission estimates that compliance with Rule 17a-4 requires 956,656
hours each year ((3,764 broker-dealers x 254 hours) + (200 broker-
dealers x 3 hours)). These burdens are recordkeeping burdens.
The staff believes that compliance personnel would be charged with
ensuring compliance with Commission regulation, including Rule 17a-4.
The staff estimates that the hourly salary of a Compliance Clerk is $70
per hour.\1\ Based upon these numbers, the total internal cost of
compliance for 3,764 respondents is the dollar cost of approximately
$67 million ((956,056 yearly hours x $70) + (600 x $70)). The total
burden hour decrease of 86,210 hours is due to a decrease in the number
of respondents from 4,104 to 3,764.
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\1\ This figure is based on SIFMA's Office Salaries in the
Securities Industry 2013, modified by Commission staff to account
for inflation and an 1,800-hour work-year multiplied by 2.93 to
account for bonuses, firm size, employee benefits, and overhead.
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Based on conversations with members of the securities industry and
the Commission's experience in the area, the staff estimates that the
average broker-dealer spends approximately $5,000 each year to store
documents required to be retained under Rule 17a-4. Costs include the
cost of physical space, computer hardware and software, etc., which
vary widely depending on the size of the broker-dealer and the type of
storage media employed. The Commission estimates that the annual
reporting and recordkeeping cost burden is $18,820,000. This cost is
calculated by the number of active, registered broker-dealers
multiplied by the reporting and recordkeeping cost for each respondent
(3,764 registered broker-dealers x $5,000).
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
estimate 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.
[[Page 35702]]
An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information under the PRA unless it
displays a currently valid OMB control number.
Please direct your written comments to: Charles Riddle, Acting
Director/Chief Information Officer, Securities and Exchange Commission,
c/o Candace Kenner, 100 F Street NE, Washington, DC 20549, or send an
email to: [email protected].
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-15695 Filed 7-23-19; 8:45 am]
BILLING CODE 8011-01-P