Submission for OMB Review; Comment Request, 29376-29378 [2015-12285]
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29376
Federal Register / Vol. 80, No. 98 / Thursday, May 21, 2015 / Notices
that are a subset of the consolidated data
stream. First, the consolidated data is
widely available in real-time at $1 per
month for non-professional users.
Second, consolidated data is also
available at no cost with a 15- or 20minute delay. Because consolidated
data contains marketwide information,
it effectively places a cap on the fees
assessed for proprietary data (such as
last sale data) that is simply a subset of
the consolidated data. The mere
availability of low-cost or free
consolidated data provides a powerful
form of pricing discipline for
proprietary data products that contain
data elements that are a subset of the
consolidated data, by highlighting the
optional nature of proprietary products.
The competitive nature of the market
for products such as NLS Plus is borne
out by the performance of the market. In
May 2008, the internet portal Yahoo!
began offering its Web site viewers realtime last sale data (as well as best quote
data) provided by BATS. In response, in
June 2008, NASDAQ launched NLS,
which was initially subject to an
‘‘enterprise cap’’ of $100,000 for
customers receiving only one of the NLS
products, and $150,000 for customers
receiving both products. The majority of
NASDAQ’s sales were at the capped
level. In early 2009, BATS expanded its
offering of free data to include depth-ofbook data. Also in early 2009, NYSE
Arca announced the launch of a
competitive last sale product with an
enterprise price of $30,000 per month.
In response, NASDAQ combined the
enterprise cap for the NLS products and
reduced the cap to $50,000 (i.e., a
reduction of $100,000 per month).
Although each of these products offers
only a specific subset of data available
from the SIPs, NASDAQ believes that
the products are viewed as substitutes
for each other and for core last-sale data,
rather than as products that must be
obtained in tandem. For example, while
Yahoo! and Google now both
disseminate NASDAQ’s product, several
other major content providers, including
MSN and Morningstar, use the BATS
product. Moreover, further evidence of
competition can be observed in the
recently-developed BATS One Feed and
BQT feed.33
In this environment, a supercompetitive increase in the fees charged
for either transactions or data has the
potential to impair revenues from both
products. ‘‘No one disputes that
competition for order flow is ‘fierce’.’’
NetCoalition I at 539. The existence of
fierce competition for order flow
implies a high degree of price sensitivity
33 See
supra note 7.
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on the part of BDs with order flow, since
they may readily reduce costs by
directing orders toward the lowest-cost
trading venues. A BD that shifted its
order flow from one platform to another
in response to order execution price
differentials would both reduce the
value of that platform’s market data and
reduce its own need to consume data
from the disfavored platform. If a
platform increases its market data fees,
the change will affect the overall cost of
doing business with the platform, and
affected BDs will assess whether they
can lower their trading costs by
directing orders elsewhere and thereby
lessening the need for the more
expensive data. Similarly, increases in
the cost of NLS Plus would impair the
willingness of distributors to take a
product for which there are numerous
alternatives, impacting NLS Plus data
revenues, the value of NLS Plus as a tool
for attracting order flow, and ultimately,
the volume of orders routed to NASDAQ
and the value of its other data products.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
No written comments were either
solicited or received.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
Within 45 days of the date of
publication of this notice in the Federal
Register or within such longer period
up to 90 days (i) as the Commission may
designate if it finds such longer period
to be appropriate and publishes its
reasons for so finding or (ii) as to which
the Exchange consents, the Commission
shall: (a) By order approve or
disapprove such proposed rule change,
or (b) institute proceedings to determine
whether the proposed rule change
should be disapproved.
Electronic Comments
• Use the Commission’s Internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include File Number SR–
NASDAQ–2015–055 on the subject line.
Fmt 4703
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All submissions should refer to File
Number SR–NASDAQ–2015–055. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
Internet Web site (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 552, will be
available for Web site viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE.,
Washington, DC 20549, on official
business days between the hours of
10:00 a.m. and 3:00 p.m. Copies of the
filing also will be available for
inspection and copying at the principal
office of the Exchange. All comments
received will be posted without change;
the Commission does not edit personal
identifying information from
submissions. You should submit only
information that you wish to make
available publicly. All submissions
should refer to File Number SR–
NASDAQ–2015–055 and should be
submitted on or before June 11, 2015.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.34
Robert W. Errett,
Deputy Secretary.
BILLING CODE 8011–01–P
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Frm 00078
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE.,
Washington, DC 20549–1090.
[FR Doc. 2015–12280 Filed 5–20–15; 8:45 am]
IV. Solicitation of Comments
PO 00000
Paper Comments
SECURITIES AND EXCHANGE
COMMISSION
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:
34 17
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Federal Register / Vol. 80, No. 98 / Thursday, May 21, 2015 / Notices
Rule 17g–5, SEC File No. 270–581, OMB
Control No. 3235–0649.
tkelley on DSK3SPTVN1PROD with NOTICES
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 approval of
extension of the previously approved
collection of information provided for in
Rule 17g–5 (17 CFR 240.17g–5) under
the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) (‘‘Exchange Act’’).
The Credit Rating Agency Reform Act
of 2006 (Pub. L. 109–291) (‘‘Rating
Agency Act’’), enacted on September 29,
2006, defines the term ‘‘nationally
recognized statistical rating
organization,’’ or ‘‘NRSRO’’ and
provides authority for the Commission
to implement registration,
recordkeeping, financial reporting, and
oversight rules with respect to registered
credit rating agencies. The Rating
Agency Act added a new Section 15E,
‘‘Registration of Nationally Recognized
Statistical Rating Organizations’’ (15
U.S.C. 78o–7) to the Exchange Act.
Exchange Act Section 15E(h)(2)
provides the Commission with authority
to prohibit, or require the management
and disclosure of, any potential conflict
of interest relating to the issuance of
credit ratings by an NRSRO (15 U.S.C.
78o–7(h)(2)).
The Commission adopted, and
subsequently amended, Rule 17g–5
pursuant, in part, to Section 15E(h)(2) of
the Exchange Act.1 Rule 17g–5 requires
the disclosure of and establishment of
procedures to manage certain NRSRO
conflicts of interest, prohibits certain
other NRSRO conflicts of interest, and
contains requirements regarding the
disclosure of information in the case of
the conflict of interest of an NRSRO
issuing or maintaining a credit rating on
an asset-backed security that was paid
for by the issuer, sponsor, or
underwriter of the security.
On August 27, 2014, the Commission
adopted amendments to Rule 17g–5.2
The amendments modified the
1 See Oversight of Credit Rating Agencies
Registered as Nationally Recognized Statistical
Rating Organizations, Exchange Act Release No.
55857 (June 5, 2007), 72 FR 33564, 33595–33599
(June 18, 2007); Amendments to Rules for
Nationally Recognized Statistical Rating
Organizations, Exchange Act Release No. 59342
(Feb. 2, 2009) 74 FR 6456, 6465–6469 (Feb. 9, 2009);
and Amendments to Rules for Nationally
Recognized Statistical Rating Organizations,
Exchange Act Release No. 61050 (Nov. 23, 2009),
74 FR 63832, 63842–63850 (Dec. 4, 2009).
2 See Nationally Recognized Statistical Rating
Organizations, Exchange Act Release No. 72936
(August 27, 2014), 79 FR 55078, 55107–55194 (Sept.
15, 2014) (‘‘Adopting Release’’).
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collection of information included in
Rule 17g–5 in three ways. First, the
Commission added paragraph
(a)(3)(iii)(E) to Rule 17g–5 to require an
NRSRO to obtain a representation from
the issuer, sponsor, or underwriter of an
asset-backed security that the issuer,
sponsor, or underwriter will post on the
Web site referred to in paragraph
(a)(3)(iii) of Rule 17g–5 (‘‘Rule 17g–5
Web site’’), promptly after receipt, any
executed Form ABS Due Diligence-15E
delivered by a person employed to
provide third-party due diligence
services with respect to the security or
money market instrument.
Second, the Commission added
paragraph (c)(8) to Rule 17g–5 to
prohibit an NRSRO from issuing or
maintaining a credit rating where a
person within the NRSRO who
participates in determining or
monitoring the credit rating, or
developing or approving procedures or
methodologies used for determining the
credit rating, including qualitative and
quantitative models, also: (1)
Participates in sales or marketing of a
product or service of the NRSRO or a
product or service of an affiliate of the
NRSRO; or (2) is influenced by sales or
marketing considerations.
Third, the Commission added
paragraph (f) to Rule 17g–5, which
provides that upon written application
by an NRSRO the Commission may
exempt, either unconditionally or on
specified terms and conditions, the
NRSRO from paragraph (c)(8) of Rule
17g–5 if the Commission finds that due
to the small size of the NRSRO it is not
appropriate to require the separation of
the production of credit ratings from
sales and marketing activities and the
exemption is in the public interest.
The collection of information
obligation imposed by Rule 17g–5 is
mandatory for credit rating agencies that
are applying to register or are registered
with the Commission as NRSROs.
Registration with the Commission as an
NRSRO is voluntary.
Paragraph (a)(3) of Rule 17g–5
requires disclosures by NRSROs on a
transaction by transaction basis. The
Commission estimates that the total
number of structured finance ratings
issued by all NRSROs in a given year is
approximately 2,436 and that it would
take 1 hour per transaction to make the
information publicly available. The
Commission therefore estimates that the
corresponding annual disclosure burden
for NRSROs is approximately 2,436
hours industry-wide.
Paragraph (a)(3) of Rule 17g–5 also
requires arrangers to disclose certain
information. The Commission
previously estimated that there are
PO 00000
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29377
approximately 200 arrangers subject to
the rule. The Commission estimates that
it would take approximately 300 hours
to develop a system, as well as the
policies and procedures, for the
disclosures required by Rule 17g–5. In
the Adopting Release, the Commission
estimated that there are approximately
336 issuers, sponsors, or underwriters of
asset-backed securities. Therefore, the
one-time burden for the additional 136
respondents is approximately 40,800
hours. The Commission therefore
estimates that, over a three-year period,
the total industry-wide one-time burden
would be approximately 13,600 hours
per year when annualized over three
years.
Paragraph (a)(3) of Rule 17g–5 also
requires disclosures by arrangers on a
transaction by transaction basis. The
Commission estimates that 336
arrangers would arrange approximately
20 new transactions per year and that it
would take 1 hour per transaction to
make the information publicly available,
resulting in a total annual disclosure
burden of approximately 6,720 hours.
Paragraph (a)(3) of Rule 17g–5 also
requires disclosure of information by
arrangers on an ongoing basis that is
used by an NRSRO to undertake credit
rating surveillance on the structured
finance product. The Commission
estimates this disclosure would be
required for approximately 125
transactions a month, and it would take
each respondent approximately 0.5
hours per transaction to disclose the
information. Therefore, the Commission
estimates that it would take each
respondent approximately 750 hours on
an annual basis to disclose such
information, for a total aggregate annual
disclosure burden of 252,000 hours.
Paragraph (e) of Rule 17g–5 requires
NRSROs to submit an annual
certification to the Commission. The
Commission estimates that it would take
each NRSRO approximately 2 hours to
complete the certification, resulting in a
total industry-wide annual reporting
burden for 10 NRSROs of 20 hours.
New paragraph (a)(3)(iii)(E) of Rule
17g–5 may require NRSROs to redraft
the agreement templates they use with
respect to obtaining representations
from issuers, sponsors, or underwriters
as required under Rule 17g–5. The
Commission estimates that an NRSRO
will spend approximately two hours on
a one-time basis to redraft these
templates with respect to each issuer,
sponsor, or underwriter, for a total
industry-wide one-time disclosure
burden of approximately 6,720 hours.
The Commission therefore estimates
that the total one-time disclosure
burden to redraft the templates would
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Federal Register / Vol. 80, No. 98 / Thursday, May 21, 2015 / Notices
be approximately 2,240 hours per year
when annualized over three years.
New paragraph (a)(3)(iii)(E) of Rule
17g–5 also requires issuers, sponsors,
and underwriters to post on the Rule
17g–5 Web sites any executed Form
ABS Due Diligence-15E delivered by a
person employed to provide third-party
due diligence services. The Commission
estimates that issuers, sponsors, and
underwriters will need to post
approximately 715 Forms ABS Due
Diligence-15E on Rule 17g–5 Web sites
per year (in addition to the information
that is already posted to the Web sites).
The Commission estimates that it will
take the issuer, sponsor, or underwriter
approximately ten minutes to upload
each form and post it to the Web site,
for a total industry-wide annual
disclosure burden of approximately 119
hours.
As a consequence of the new absolute
prohibition in paragraph (c)(8) of Rule
17g–5, the Commission believes that an
NRSRO will need to update the written
policies and procedures to address and
manage conflicts of interest the NRSRO
must establish, maintain, and enforce
under Section 15E(h) of the Exchange
Act and Rule 17g–5. The Commission
estimates that updating the conflicts of
interest policies and procedures would
take an NRSRO an average of
approximately 100 hours, for an
industry-wide one-time reporting
burden of approximately 1,000 hours. In
addition, Exhibit 7 to Form NRSRO
requires an NRSRO to provide a copy of
the written policies and procedures in
the exhibit. Paragraph (e) of Rule 17g–
1 requires an NRSRO to promptly file
with the Commission an update of its
registration on Form NRSRO when
information on the form is materially
inaccurate. The update of registration
must be filed electronically on the
Commission’s EDGAR system. The
Commission estimates that it would take
an NRSRO an average of approximately
twenty-five hours on a one-time basis to
prepare and file the update of
registration to account for the update of
the NRSRO’s written policies and
procedures to address and manage
conflicts of interest, for an industrywide one-time reporting burden of
approximately 250 hours. The
Commission therefore estimates that the
total one-time reporting burden to
update the conflicts of interest policies
and procedures and to prepare and file
an update of registration to account for
the update of the NRSRO’s written
policies and procedures would be 1,250
hours, or approximately 417 hours per
year when annualized over three years.
Finally, paragraph (f) of Rule 17g–5
permits an NRSRO to apply for an
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exemption from the prohibited conflict
under paragraph (c)(8) of Rule 17g–5.
The Commission estimated that an
NRSRO would likely spend an average
of approximately 150 hours to draft and
submit the application to the
Commission. If all 10 NRSROs apply for
an exemption, this would result in a
one-time industry-wide reporting
burden of 1,500 hours, or approximately
500 hours per year when annualized
over 3 years.
Accordingly, the total estimated
burden associated with Rule 17g–5 is
50,270 hours on a one-time basis
(40,800 + 6,720 + 1,250 +1,500 = 50,270)
and 261,295 hours on an annual basis
(2,436 + 6,720 + 252,000 + 20 +119 =
261,295).
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 background
documentation for this information
collection at the following Web site:
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:
Shagufta_Ahmed@omb.eop.gov; and (ii)
Pamela Dyson, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington,
DC 20549, or by sending an email to:
PRA_Mailbox@sec.gov. Comments must
be submitted to OMB within 30 days of
this notice.
Dated: May 15, 2015.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015–12285 Filed 5–20–15; 8:45 am]
Incident Period: 04/03/2015 through
04/05/2015.
Effective Date: 05/14/2015.
Physical Loan Application Deadline
Date: 07/13/2015.
Economic Injury (EIDL) Loan
Application Deadline Date: 02/15/2016.
ADDRESSES: Submit completed loan
applications to: U.S. Small Business,
Administration Processing and
Disbursement Center, 14925 Kingsport
Road, Fort Worth, TX 76155.
FOR FURTHER INFORMATION CONTACT: A.
Escobar, Office of Disaster Assistance,
U.S. Small Business Administration,
409 3rd Street SW., Suite 6050,
Washington, DC 20416.
SUPPLEMENTARY INFORMATION: Notice is
hereby given that as a result of the
President’s major disaster declaration on
05/14/2015, Private Non-Profit
organizations that provide essential
services of governmental nature may file
disaster loan applications at the address
listed above or other locally announced
locations.
The following areas have been
determined to be adversely affected by
the disaster:
Primary Counties: Boone; Cabell;
Lincoln; Logan; Mingo; Wayne.
The Interest Rates are:
Percent
For Physical Damage:
Non-Profit Organizations With
Credit Available Elsewhere ...
Non-Profit Organizations Without Credit Available Elsewhere .....................................
For Economic Injury:
Non-Profit Organizations Without Credit Available Elsewhere .....................................
2.625
2625
2.625
The number assigned to this disaster
for physical damage is 14317B and for
economic injury is 14318B.
BILLING CODE 8011–01–P
(Catalog of Federal Domestic Assistance
Numbers 59002 and 59008).
SMALL BUSINESS ADMINISTRATION
James E. Rivera,
Associate Administrator for Disaster
Assistance.
[Disaster Declaration #14317 and #14318]
West Virginia Disaster #WV–00038
U.S. Small Business
Administration.
ACTION: Notice.
[FR Doc. 2015–12372 Filed 5–20–15; 8:45 am]
BILLING CODE 8025–01–P
AGENCY:
SMALL BUSINESS ADMINISTRATION
This is a Notice of the
Presidential declaration of a major
disaster for Public Assistance Only for
the State of West Virginia (FEMA–4219–
DR), dated 05/14/2015.
Incident: Sever Storms, Flooding,
Landslides, and Mudslides.
SUMMARY:
PO 00000
Frm 00080
Fmt 4703
Sfmt 4703
Administrator’s Line of Succession
Designation, No. 1–A, Revision 35
This document replaces and
supersedes ‘‘Line of Succession
Designation No. 1–A, Revision 34.’’
Line of Succession Designation No. 1–
A, Revision 35: Effective immediately,
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]]>Agencies
[Federal Register Volume 80, Number 98 (Thursday, May 21, 2015)]
[Notices]
[Pages 29376-29378]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-12285]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
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:
[[Page 29377]]
Rule 17g-5, SEC File No. 270-581, OMB Control No. 3235-0649.
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 approval of extension of the
previously approved collection of information provided for in Rule 17g-
5 (17 CFR 240.17g-5) under the Securities Exchange Act of 1934 (15
U.S.C. 78a et seq.) (``Exchange Act'').
The Credit Rating Agency Reform Act of 2006 (Pub. L. 109-291)
(``Rating Agency Act''), enacted on September 29, 2006, defines the
term ``nationally recognized statistical rating organization,'' or
``NRSRO'' and provides authority for the Commission to implement
registration, recordkeeping, financial reporting, and oversight rules
with respect to registered credit rating agencies. The Rating Agency
Act added a new Section 15E, ``Registration of Nationally Recognized
Statistical Rating Organizations'' (15 U.S.C. 78o-7) to the Exchange
Act. Exchange Act Section 15E(h)(2) provides the Commission with
authority to prohibit, or require the management and disclosure of, any
potential conflict of interest relating to the issuance of credit
ratings by an NRSRO (15 U.S.C. 78o-7(h)(2)).
The Commission adopted, and subsequently amended, Rule 17g-5
pursuant, in part, to Section 15E(h)(2) of the Exchange Act.\1\ Rule
17g-5 requires the disclosure of and establishment of procedures to
manage certain NRSRO conflicts of interest, prohibits certain other
NRSRO conflicts of interest, and contains requirements regarding the
disclosure of information in the case of the conflict of interest of an
NRSRO issuing or maintaining a credit rating on an asset-backed
security that was paid for by the issuer, sponsor, or underwriter of
the security.
---------------------------------------------------------------------------
\1\ See Oversight of Credit Rating Agencies Registered as
Nationally Recognized Statistical Rating Organizations, Exchange Act
Release No. 55857 (June 5, 2007), 72 FR 33564, 33595-33599 (June 18,
2007); Amendments to Rules for Nationally Recognized Statistical
Rating Organizations, Exchange Act Release No. 59342 (Feb. 2, 2009)
74 FR 6456, 6465-6469 (Feb. 9, 2009); and Amendments to Rules for
Nationally Recognized Statistical Rating Organizations, Exchange Act
Release No. 61050 (Nov. 23, 2009), 74 FR 63832, 63842-63850 (Dec. 4,
2009).
---------------------------------------------------------------------------
On August 27, 2014, the Commission adopted amendments to Rule 17g-
5.\2\ The amendments modified the collection of information included in
Rule 17g-5 in three ways. First, the Commission added paragraph
(a)(3)(iii)(E) to Rule 17g-5 to require an NRSRO to obtain a
representation from the issuer, sponsor, or underwriter of an asset-
backed security that the issuer, sponsor, or underwriter will post on
the Web site referred to in paragraph (a)(3)(iii) of Rule 17g-5 (``Rule
17g-5 Web site''), promptly after receipt, any executed Form ABS Due
Diligence-15E delivered by a person employed to provide third-party due
diligence services with respect to the security or money market
instrument.
---------------------------------------------------------------------------
\2\ See Nationally Recognized Statistical Rating Organizations,
Exchange Act Release No. 72936 (August 27, 2014), 79 FR 55078,
55107-55194 (Sept. 15, 2014) (``Adopting Release'').
---------------------------------------------------------------------------
Second, the Commission added paragraph (c)(8) to Rule 17g-5 to
prohibit an NRSRO from issuing or maintaining a credit rating where a
person within the NRSRO who participates in determining or monitoring
the credit rating, or developing or approving procedures or
methodologies used for determining the credit rating, including
qualitative and quantitative models, also: (1) Participates in sales or
marketing of a product or service of the NRSRO or a product or service
of an affiliate of the NRSRO; or (2) is influenced by sales or
marketing considerations.
Third, the Commission added paragraph (f) to Rule 17g-5, which
provides that upon written application by an NRSRO the Commission may
exempt, either unconditionally or on specified terms and conditions,
the NRSRO from paragraph (c)(8) of Rule 17g-5 if the Commission finds
that due to the small size of the NRSRO it is not appropriate to
require the separation of the production of credit ratings from sales
and marketing activities and the exemption is in the public interest.
The collection of information obligation imposed by Rule 17g-5 is
mandatory for credit rating agencies that are applying to register or
are registered with the Commission as NRSROs. Registration with the
Commission as an NRSRO is voluntary.
Paragraph (a)(3) of Rule 17g-5 requires disclosures by NRSROs on a
transaction by transaction basis. The Commission estimates that the
total number of structured finance ratings issued by all NRSROs in a
given year is approximately 2,436 and that it would take 1 hour per
transaction to make the information publicly available. The Commission
therefore estimates that the corresponding annual disclosure burden for
NRSROs is approximately 2,436 hours industry-wide.
Paragraph (a)(3) of Rule 17g-5 also requires arrangers to disclose
certain information. The Commission previously estimated that there are
approximately 200 arrangers subject to the rule. The Commission
estimates that it would take approximately 300 hours to develop a
system, as well as the policies and procedures, for the disclosures
required by Rule 17g-5. In the Adopting Release, the Commission
estimated that there are approximately 336 issuers, sponsors, or
underwriters of asset-backed securities. Therefore, the one-time burden
for the additional 136 respondents is approximately 40,800 hours. The
Commission therefore estimates that, over a three-year period, the
total industry-wide one-time burden would be approximately 13,600 hours
per year when annualized over three years.
Paragraph (a)(3) of Rule 17g-5 also requires disclosures by
arrangers on a transaction by transaction basis. The Commission
estimates that 336 arrangers would arrange approximately 20 new
transactions per year and that it would take 1 hour per transaction to
make the information publicly available, resulting in a total annual
disclosure burden of approximately 6,720 hours.
Paragraph (a)(3) of Rule 17g-5 also requires disclosure of
information by arrangers on an ongoing basis that is used by an NRSRO
to undertake credit rating surveillance on the structured finance
product. The Commission estimates this disclosure would be required for
approximately 125 transactions a month, and it would take each
respondent approximately 0.5 hours per transaction to disclose the
information. Therefore, the Commission estimates that it would take
each respondent approximately 750 hours on an annual basis to disclose
such information, for a total aggregate annual disclosure burden of
252,000 hours.
Paragraph (e) of Rule 17g-5 requires NRSROs to submit an annual
certification to the Commission. The Commission estimates that it would
take each NRSRO approximately 2 hours to complete the certification,
resulting in a total industry-wide annual reporting burden for 10
NRSROs of 20 hours.
New paragraph (a)(3)(iii)(E) of Rule 17g-5 may require NRSROs to
redraft the agreement templates they use with respect to obtaining
representations from issuers, sponsors, or underwriters as required
under Rule 17g-5. The Commission estimates that an NRSRO will spend
approximately two hours on a one-time basis to redraft these templates
with respect to each issuer, sponsor, or underwriter, for a total
industry-wide one-time disclosure burden of approximately 6,720 hours.
The Commission therefore estimates that the total one-time disclosure
burden to redraft the templates would
[[Page 29378]]
be approximately 2,240 hours per year when annualized over three years.
New paragraph (a)(3)(iii)(E) of Rule 17g-5 also requires issuers,
sponsors, and underwriters to post on the Rule 17g-5 Web sites any
executed Form ABS Due Diligence-15E delivered by a person employed to
provide third-party due diligence services. The Commission estimates
that issuers, sponsors, and underwriters will need to post
approximately 715 Forms ABS Due Diligence-15E on Rule 17g-5 Web sites
per year (in addition to the information that is already posted to the
Web sites). The Commission estimates that it will take the issuer,
sponsor, or underwriter approximately ten minutes to upload each form
and post it to the Web site, for a total industry-wide annual
disclosure burden of approximately 119 hours.
As a consequence of the new absolute prohibition in paragraph
(c)(8) of Rule 17g-5, the Commission believes that an NRSRO will need
to update the written policies and procedures to address and manage
conflicts of interest the NRSRO must establish, maintain, and enforce
under Section 15E(h) of the Exchange Act and Rule 17g-5. The Commission
estimates that updating the conflicts of interest policies and
procedures would take an NRSRO an average of approximately 100 hours,
for an industry-wide one-time reporting burden of approximately 1,000
hours. In addition, Exhibit 7 to Form NRSRO requires an NRSRO to
provide a copy of the written policies and procedures in the exhibit.
Paragraph (e) of Rule 17g-1 requires an NRSRO to promptly file with the
Commission an update of its registration on Form NRSRO when information
on the form is materially inaccurate. The update of registration must
be filed electronically on the Commission's EDGAR system. The
Commission estimates that it would take an NRSRO an average of
approximately twenty-five hours on a one-time basis to prepare and file
the update of registration to account for the update of the NRSRO's
written policies and procedures to address and manage conflicts of
interest, for an industry-wide one-time reporting burden of
approximately 250 hours. The Commission therefore estimates that the
total one-time reporting burden to update the conflicts of interest
policies and procedures and to prepare and file an update of
registration to account for the update of the NRSRO's written policies
and procedures would be 1,250 hours, or approximately 417 hours per
year when annualized over three years.
Finally, paragraph (f) of Rule 17g-5 permits an NRSRO to apply for
an exemption from the prohibited conflict under paragraph (c)(8) of
Rule 17g-5. The Commission estimated that an NRSRO would likely spend
an average of approximately 150 hours to draft and submit the
application to the Commission. If all 10 NRSROs apply for an exemption,
this would result in a one-time industry-wide reporting burden of 1,500
hours, or approximately 500 hours per year when annualized over 3
years.
Accordingly, the total estimated burden associated with Rule 17g-5
is 50,270 hours on a one-time basis (40,800 + 6,720 + 1,250 +1,500 =
50,270) and 261,295 hours on an annual basis (2,436 + 6,720 + 252,000 +
20 +119 = 261,295).
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 background documentation for this information
collection at the following Web site: 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:
Shagufta_Ahmed@omb.eop.gov; and (ii) Pamela Dyson, Director/Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 100 F Street NE., Washington, DC 20549, or by sending an
email to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within
30 days of this notice.
Dated: May 15, 2015.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2015-12285 Filed 5-20-15; 8:45 am]
BILLING CODE 8011-01-P
