Proposed Collection; Comment Request, 54862 [E9-25485]

Agencies

• SECURITIES AND EXCHANGE COMMISSION

[Federal Register Volume 74, Number 204 (Friday, October 23, 2009)]
[Notices]
[Page 54862]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E9-25485]


-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION


Proposed Collection; Comment Request

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

Extension: 
    Rule 17i-4, SEC File No. 270-530, OMB Control No. 3235-0594.

    Notice is hereby given that pursuant to the Paperwork Reduction Act 
of 1995 \1\ the Securities and Exchange Commission (``Commission'') has 
submitted to the Office of Management and Budget requests for extension 
of the previously approved collections of information discussed below. 
The Code of Federal Regulations citation to this collection of 
information is the following: 17 CFR 240.17i-4.
---------------------------------------------------------------------------

    \1\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

    Section 231 of the Gramm-Leach-Bliley Act of 1999 \2\ (the 
``GLBA'') amended Section 17 of the Securities Exchange Act of 1934 to 
create a regulatory framework under which a holding company of a 
broker-dealer (``investment bank holding company'' or ``IBHC'') may 
voluntarily be supervised by the Commission as a supervised investment 
bank holding company (or ``SIBHC'').\3\ In 2004, the Commission 
promulgated rules, including Rule 17i-4, to create a framework for the 
Commission to supervise SIBHCs.\4\ This framework includes 
qualification criteria for SIBHCs, as well as recordkeeping and 
reporting requirements. Among other things, this regulatory framework 
for SIBHCs is intended to provide a basis for non-U.S. financial 
regulators to treat the Commission as the principal U.S. consolidated, 
home-country supervisor for SIBHCs and their affiliated broker-
dealers.\5\
---------------------------------------------------------------------------

    \2\ Public Law No. 106-102, 113 Stat. 1338 (1999).
    \3\ See 15 U.S.C. 78q(i).
    \4\ See Exchange Act Release No. 49831 (Jun. 8, 2004), 69 FR 
34472 (Jun. 21, 2004).
    \5\ See H.R. Conf. Rep. No. 106-434, 165 (1999). See also 
Exchange Act Release No. 49831, at 6 (Jun. 8, 2004), 69 FR 34472, at 
34473 (Jun. 21, 2004).
---------------------------------------------------------------------------

    Rule 17i-4 requires an SIBHC to comply with present Exchange Act 
Rule 15c3-4 \6\ as though it were a broker-dealer, which requires that 
the firm establish, document and maintain a system of internal risk 
management controls to assist it in managing the risks associated with 
its business activities (including market, credit, operational, 
funding, and legal risks). In addition, Rule 17i-4 requires that an 
SIBHC establish, document, and maintain procedures for the detection 
and prevention of money laundering and terrorist financing as part of 
its internal risk management control system. Finally, Rule 17i-4 
requires that an SIBHC periodically review its internal risk management 
control system for integrity of the risk measurement, monitoring, and 
management process, and accountability, at the appropriate 
organizational level, for defining the permitted scope of activity and 
level of risk. The records required to be created pursuant to Rule 17i-
4 must be preserved for a period of not less than three years.\7\
---------------------------------------------------------------------------

    \6\ 17 CFR 240.15c3-4.
    \7\ 17 CFR 240.17i-5(b)(5).
---------------------------------------------------------------------------

    The collection of information required pursuant to Rule 17i-4 is 
needed so that the Commission can adequately supervise the activities 
of these SIBHCs, and to allow the Commission to effectively determine 
whether supervision of an IBHC as an SIBHC is necessary or appropriate 
in furtherance of the purposes of Section 17 of the Act. Without this 
information, the Commission would be unable to adequately supervise the 
SIBHC as provided for under the Exchange Act.
    We estimate that three IBHCs will file Notices of Intention with 
the Commission to be supervised by the Commission as SIBHCs. An SIBHC 
will require, on average, about 3,600 hours to assess its present 
structure, businesses, and controls, and establish and document its 
risk management control system. In addition, an SIBHC will require, on 
average, approximately 250 hours each year to maintain its risk 
management control system. Consequently, the total initial burden for 
all SIBHCs is approximately 10,800 hours \8\ and the continuing annual 
burden is about 750 hours.\9\ Thus, the total burden relating to Rule 
17i-4 for all SIBHCs is approximately 11,550 hours \10\ in the first 
year, and approximately 750 hours each year thereafter.\11\
---------------------------------------------------------------------------

    \8\ (3,600 hours x 3 SIBHCs) = 10,800 hours.
    \9\ (250 hours per year x 3 SIBHCs) = 750 hours per year.
    \10\ (3,600 hours x 3 SIBHCs) + (250 hours per year x 3 SIBHCs.)
    \11\ (250 hours per year x 3 SIBHCs).
---------------------------------------------------------------------------

    We believe that an IBHC likely would upgrade its information 
technology (``IT'') systems in order to more efficiently comply with 
certain of the SIBHC framework rules (including Rules 17i-4, 17i-5, 
17i-6 and 17i-7), and that this would be a one-time cost. Depending on 
the state of development of the IBHC's IT systems, it would cost an 
IBHC between $1 million and $10 million to upgrade its IT systems to 
comply with the SIBHC framework of rules. Thus, on average, it would 
cost each of the three SIBHCs about $5.5 million to upgrade their IT 
systems, or approximately $16.5 million in total. It is impossible to 
determine what percentage of the IT systems costs would be attributable 
to each Rule, so we allocated the total estimated upgrade costs equally 
(at 25% for each of the above-mentioned Rules), with $4,125,000 
attributable to Rule 17i-5.
    Written comments are invited on: (a) Whether the 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: PRA_Mailbox@sec.gov.

     October 19, 2009.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-25485 Filed 10-22-09; 8:45 am]
BILLING CODE 8011-01-P