[Federal Register Volume 84, Number 189 (Monday, September 30, 2019)]
[Notices]
[Pages 51692-51693]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21081]


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SECURITIES AND EXCHANGE COMMISSION

[SEC File No. 270-198, OMB Control No. 3235-0279]


Submission for OMB Review; 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

    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'') has submitted to the Office of Management 
and Budget (``OMB'') a request for extension of the previously approved 
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.).
    Rule 17a-4 requires approximately 3,764 active, registered exchange 
members, brokers, and dealers (``broker-dealers'') to preserve for 
prescribed periods of time certain records required to be made by Rule 
17a-3 and other Commission rules, and other kinds of records which 
firms make or receive in the ordinary course of business. Rule 17a-4 
also permits broker-dealers to employ, under certain conditions, 
electronic storage media to maintain these required records. The 
records required to be maintained under Rule 17a-4 are used by 
examiners and other representatives of the Commission to determine 
whether broker-dealers are in compliance with, and to enforce their 
compliance with, the Commission's rules.
    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. In addition, paragraph (b)(11) of Rule 17a-
4 requires any broker-dealer that sponsors an internal broker-dealer 
system to maintain certain records relating to such system for at least 
three years. 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

[[Page 51693]]

requires 956,656 hours each year ((3,764 broker-dealers x 254 hours) + 
(200 broker-dealers x 3 hours) \1\. These burdens are recordkeeping 
burdens.
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    \1\ On June 5, 2019, the Commission adopted Rule 151-1 under the 
Securities Exchange Act of 1934 establishing a standard of conduct 
for broker-dealers and natural persons who are associated persons of 
a broker-dealer when making a recommendation of any securities. See 
Securities Exchange Act Release No. 86031 (June 5, 2019), 84 FR 
33318 (July 12, 2019). At the same time, the Commission adopted 
Exchange Act Rule 17a-14 (CFR 240.17a-14) and Form CRS (17 CFR 
249.640) under the Exchange Act. See Form CRS Relationship Summary; 
Amendments to Form ADV Exchange Act Release No. 86032, Advisers Act 
Release No. 5247, File No. S7-08-18 (June 5, 2019), 84 FR 33492 
(July 12, 2019). As part of new Rule 17a-14 and Form CRS, and 
Regulation Best Interest, the Commission amended Rule 17a-4 by 
adding new paragraphs (a)(24) and (a)(35). The collections of 
information and the related burdens associated with these amendments 
have been separately noticed for comment and are currently under 
review.
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    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.\2\ Based upon these numbers, the total internal cost of 
compliance for 4,104 respondents is the dollar cost of approximately 
$67 (956,656 yearly hours x $70). The total burden hour decrease of 
86,210 is due to a decrease in the number of respondents from 4,104 to 
3,764.
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    \2\ This figure is based on SIFMA's Office Salaries in the 
Securities Industry 2013, modified by Commission staff to account 
for 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 active, registered broker-dealers x $5,000).
    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.
    The public may view the background documentation for this 
information collection at the following website: 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: 
[email protected]; and (ii) Charles Riddle, Acting Director/
Chief Information Officer, Securities and Exchange Commission, c/o 
Candace Kenner, 100 F Street NE, Washington, DC 20549, or by sending an 
email to: [email protected]. Comments must be submitted to OMB within 
30 days of this notice.

    Dated: September 24, 2019.
Jill M. Peterson,
Assistant Secretary.
[FR Doc. 2019-21081 Filed 9-27-19; 8:45 am]
BILLING CODE 8011-01-P