Proposed Collection; Comment Request, 2153-2154 [2011-475]
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Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices
There are approximately 5,057 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.
Thus the staff estimates that the total
compliance burden for 5,057
respondents is 1,284,478 hours.
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 $67 per hour.1
Based upon these numbers, the total
cost of compliance for 5,057
respondents is the dollar cost of
approximately $86.1 million (1,284,478
yearly hours × $67). The total burden
hour decrease of 468,122 is due to a
decrease in the number of respondents
from 6,900 to 5,057.
Based on conversations with members
of the securities industry and based on
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 record-keeping cost
burden is $25,285,000. This cost is
calculated by the number of active,
registered broker-dealers multiplied by
the reporting and record-keeping cost
for each respondent (5,057 active,
registered broker-dealers × $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
agency, including whether the
information shall have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the proposed collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information to be 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.
1 This figure is based on SIFMA’s Office Salaries
in the Securities Industry 2010, modified by
Commission staff to account for an 1800-hour workyear multiplied by 2.93 to account for bonuses, firm
size, employee benefits, and overhead.
VerDate Mar<15>2010
17:25 Jan 11, 2011
Jkt 223001
Please direct your written comments
to: Thomas Bayer, Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
6432 General Green Way, Alexandria,
Virginia 22312 or send an e-mail to:
PRA_Mailbox@sec.gov.
Dated: January 6, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–476 Filed 1–11–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of Investor
Education and Advocacy,
Washington, DC 20549–0213.
Extension:
Rule 15c3–3; SEC File No. 270–087; OMB
Control No. 3235–0078.
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 existing collection of information
provided for in Rule 15c3–3 (17 CFR
240.15c3–3), 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
for extension and approval.
Rule 15c3–3 requires that a brokerdealer that holds customer securities
obtain and maintain possession and
control of fully-paid and excess margin
securities they hold for customers. In
addition, the Rule requires that a brokerdealer that holds customer funds make
either a weekly or monthly computation
to determine whether certain customer
funds need to be segregated in a special
reserve bank account for the exclusive
benefit of the firm’s customers. It also
requires that a broker-dealer maintain a
written notification from each bank
where a Special Reserve Bank Account
is held acknowledging that all assets in
the account are for the exclusive benefit
of the broker-dealer’s customers, and to
provide written notification to the
Commission (and its designated
examining authority) under certain,
specified circumstances. Finally,
paragraph (o) of Rule 15c3–3, which
applies only to broker-dealers that sell
securities futures products (‘‘SFP’’) to
customers, requires that such brokerdealers provide certain notifications to
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Fmt 4703
Sfmt 4703
2153
customers, and to make a record of any
changes of account type.
There are approximately 279 brokerdealers fully subject to the Rule (i.e.,
broker-dealers that cannot claim any of
the exemptions enumerated at
paragraph (k)), of which approximately
13 make daily, 210 make weekly, and 56
make monthly, reserve computations.
On average, each of these respondents
require approximately 2.5 hours to
complete a computation. Accordingly,
Commission staff estimates that the
resulting burden totals 36,780 hours
annually ((2.5 hours × 240 computations
× 13 respondents that calculate daily) +
(2.5 hours × 52 computations × 210
respondents that calculate weekly) +
(2.5 hours × 12 computations × 56
respondents that calculate monthly)).
A broker-dealer required to maintain
the Special Reserve Bank Account
prescribed by Rule 15c3–3 must obtain
and retain a written notification from
each bank in which it has a Special
Reserve Bank Account to evidence
bank’s acknowledgement that assets
deposited in the Account are being held
by the bank for the exclusive benefit of
the broker-dealer’s customers. As stated
previously, 279 broker-dealers are
presently fully-subject to Rule 15c3–3.
In addition, 120 broker-dealers operate
in accordance with the exemption
provided in paragraph (k)(2)(i) which
also requires that a broker-dealer
maintain a Special Reserve Bank
Account. The staff estimates that of the
total broker-dealers that must comply
with this rule, only 25%, or 100 ((279
+ 120) × .25) must obtain 1 new letter
each year (either because the brokerdealer changed the type of business it
does and became subject to either
paragraph (e)(3) or (k)(2)(i) or simply
because the broker-dealer established a
new Special Reserve Bank Account).
The staff estimates that it would take a
broker-dealer approximately 1 hour to
obtain this written notification from a
bank regarding a Special Reserve Bank
Account because the language in these
letters is largely standardized.
Therefore, Commission staff estimates
that broker-dealers will spend
approximately 100 hours each year to
obtain these written notifications.
In addition, a broker-dealer must
immediately notify the Commission and
its designated examining authority if it
fails to make a required deposit to its
Special Reserve Bank Account.
Commission staff estimates that brokerdealers file approximately 33 such
notices per year. Broker-dealers would
require approximately 30 minutes, on
average, to file such a notice. Therefore,
Commission staff estimates that brokerdealers would spend a total of
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2154
Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices
approximately 17 hours each year to
comply with the notice requirement of
Rule 15c3–3.
Finally, a broker-dealer that effects
transactions in SFPs for customers also
will have paperwork burdens associated
with the requirement in paragraph (o) of
Rule 15c3–3 to make a record of each
change in account type.1 More
specifically, a broker-dealer that
changes the type of account in which a
customer’s SFPs are held must create a
record of each change in account type
that includes the name of the customer,
the account number, the date the brokerdealer received the customer’s request
to change the account type, and the date
the change in account type took place.
As of December 31, 2009, broker-dealers
that were also registered as futures
commission merchants reported that
they maintained 35,242,468 customer
accounts. The staff estimates that 8% of
these customers may engage in SFP
transactions (35,242,468 accounts × 8%
= 2,819,397). Further, the staff estimates
that 20% per year may change account
type. Thus, broker-dealers may be
required to create this record for up to
563,879 accounts (2,819,397 accounts ×
20%). The staff believes that it will take
approximately 3 minutes to create each
record.2 Thus, the total annual burden
associated with creating a record of
change of account type will be 28,194
hours (563,879 accounts × (3min/
60min)).
Consequently, the staff estimates that
the total annual burden hours associated
with Rule 15c3–3 would be
approximately 65,091 hours (36,780
hours + 100 hours + 17 hours + 28,194
hours).
The staff estimates that a brokerdealer would have (1) A financial
reporting manager make a record of its
reserve computations and send the
required notices to the Commission, (2)
an attorney obtain the written
notifications from banks where it has a
Special Reserve Bank Account to
evidence bank’s acknowledgement that
assets deposited in the Account are
being held by the bank for the exclusive
benefit of customers, and (3) a
compliance clerk create a record of each
change in account type. The staff
estimates that the hourly rate of a
financial reporting manager and an
attorney are $290 and $354,
respectively,3 and the hourly rate of a
1 17
CFR 240.15c3–3(o)(3)(i).
fact, the staff believes that most firms will
have this process automated. To the extent that no
person need be involved in the generation of this
record, the burden will be very minimal.
3 The $290/hour figure for a financial reporting
manager and the $354/hour figure for an attorney
are derived from SIFMA’s Management &
2 In
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17:25 Jan 11, 2011
Jkt 223001
compliance clerk is $67.4 Consequently,
the total cost of the above-described
hour burden would be $12,595,528.5
In addition, a broker-dealer that
effects transactions in SFPs for
customers also will have an annualized
cost burden associated with the
requirements in paragraph (o) of Rule
15c3–3 to (1) provide each customer
that plans to effect SFP transactions
with a disclosure document containing
certain information,6 and (2) send each
SFP customer notification of any change
of account type.7 Approximately 8% of
the accounts held by broker-dealers that
are also registered as FCMs, or 2,819,397
accounts, may engage in SFP
transactions. The staff estimates that the
cost of printing and sending each
disclosure document will be
approximately $.15 per document sent.8
Thus, the staff estimates that the cost of
printing and sending disclosure
documents would be approximately
$422,910 (2,819,397 accounts × $.15). In
addition, approximately 563,879
accounts (2,819,397 accounts × 20%)
may change account type per year
requiring that broker-dealers provide
notification to those customers. The
staff estimates that the cost of sending
this notification to customers will be
about $84,582 (563,879 accounts × $.15).
Consequently, the staff estimates that
the total annual cost associated with
Rule 15c3–3 would be $507,492
($422,910 + $84,583).
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 shall have practical utility;
(b) the accuracy of the agency’s estimate
of the burden of the proposed collection
of information; (c) ways to enhance the
quality, utility, and clarity of the
information to be collected; and (d)
ways to minimize the burden of the
collection of information on
respondents, including through the use
of automated collection techniques or
Professional Salaries in the Securities Industry
2010, as modified by Commission staff to account
for an 1,800 hour work-year and multiplied by 5.35
to account for bonuses, firm size, employee benefits
and overhead.
4 The $67/hour figure for a compliance clerk is
derived from SIFMA’s Office Salaries in the
Securities Industry 2010, modified by Commission
staff to account for an 1,800 hour work-year and
multiplied by 2.93 to account for bonuses, firm size,
employee benefits and overhead.
5 (((36,780 hours + 17 hours) × $290/hour) + (100
hours × $354/hour) + (28,194 hours × $67/hour)).
6 17 CFR 240.15c3–3(o)(2).
7 17 CFR 240.15c3–3(o)(3)(ii).
8 Based on past conversations with industry
representatives regarding other rule changes as
adjusted to account for inflation and increased
postage costs.
PO 00000
Frm 00074
Fmt 4703
Sfmt 4703
other forms of information technology.
Consideration will be given to
comments and suggestions submitted in
writing within 60 days of this
publication.
Please direct your written comments
to: Thomas Bayer, Chief Information
Officer, Securities and Exchange
Commission, c/o Remi Pavlik-Simon,
6432 General Green Way, Alexandria,
Virginia 22312 or send an e-mail to:
PRA_Mailbox@sec.gov.
Dated: January 6, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011–475 Filed 1–11–11; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
Proposed Collection; Comment
Request
Upon Written Request, Copies Available
From: Securities and Exchange
Commission, Office of Investor Education
and Advocacy, Washington, DC 20549–
0213.
Extension:
Rule 482; SEC File No. 270–508; OMB
Control No. 3235–0565.
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 (the
‘‘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 (‘‘OMB’’) for
extension and approval.
Like most issuers of securities, when
an investment company 1 (‘‘fund’’) offers
its shares to the public, its promotional
efforts become subject to the advertising
restrictions of the Securities Act of
1933, (15 U.S.C. 77) (the ‘‘Securities
Act’’). In recognition of the particular
problems faced by funds that
continually offer securities and wish to
advertise their securities, the
Commission has previously adopted
advertising safe harbor rules. The most
important of these is rule 482 (17 CFR
230.482) under the Securities Act,
which, under certain circumstances,
permits funds to advertise investment
performance data, as well as other
information. Rule 482 advertisements
are deemed to be ‘‘prospectuses’’ under
Section 10(b) of the Securities Act.2
1 ‘‘Investment company’’ refers to both investment
companies registered under the Investment
Company Act of 1940 and business development
companies.
2 15 U.S.C. 77j(b).
E:\FR\FM\12JAN1.SGM
12JAN1
]]>Agencies
[Federal Register Volume 76, Number 8 (Wednesday, January 12, 2011)]
[Notices]
[Pages 2153-2154]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-475]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request, Copies Available From: Securities and Exchange
Commission, Office of Investor Education and Advocacy, Washington, DC
20549-0213.
Extension:
Rule 15c3-3; SEC File No. 270-087; OMB Control No. 3235-0078.
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 existing collection of
information provided for in Rule 15c3-3 (17 CFR 240.15c3-3), 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 for extension and approval.
Rule 15c3-3 requires that a broker-dealer that holds customer
securities obtain and maintain possession and control of fully-paid and
excess margin securities they hold for customers. In addition, the Rule
requires that a broker-dealer that holds customer funds make either a
weekly or monthly computation to determine whether certain customer
funds need to be segregated in a special reserve bank account for the
exclusive benefit of the firm's customers. It also requires that a
broker-dealer maintain a written notification from each bank where a
Special Reserve Bank Account is held acknowledging that all assets in
the account are for the exclusive benefit of the broker-dealer's
customers, and to provide written notification to the Commission (and
its designated examining authority) under certain, specified
circumstances. Finally, paragraph (o) of Rule 15c3-3, which applies
only to broker-dealers that sell securities futures products (``SFP'')
to customers, requires that such broker-dealers provide certain
notifications to customers, and to make a record of any changes of
account type.
There are approximately 279 broker-dealers fully subject to the
Rule (i.e., broker-dealers that cannot claim any of the exemptions
enumerated at paragraph (k)), of which approximately 13 make daily, 210
make weekly, and 56 make monthly, reserve computations. On average,
each of these respondents require approximately 2.5 hours to complete a
computation. Accordingly, Commission staff estimates that the resulting
burden totals 36,780 hours annually ((2.5 hours x 240 computations x 13
respondents that calculate daily) + (2.5 hours x 52 computations x 210
respondents that calculate weekly) + (2.5 hours x 12 computations x 56
respondents that calculate monthly)).
A broker-dealer required to maintain the Special Reserve Bank
Account prescribed by Rule 15c3-3 must obtain and retain a written
notification from each bank in which it has a Special Reserve Bank
Account to evidence bank's acknowledgement that assets deposited in the
Account are being held by the bank for the exclusive benefit of the
broker-dealer's customers. As stated previously, 279 broker-dealers are
presently fully-subject to Rule 15c3-3. In addition, 120 broker-dealers
operate in accordance with the exemption provided in paragraph
(k)(2)(i) which also requires that a broker-dealer maintain a Special
Reserve Bank Account. The staff estimates that of the total broker-
dealers that must comply with this rule, only 25%, or 100 ((279 + 120)
x .25) must obtain 1 new letter each year (either because the broker-
dealer changed the type of business it does and became subject to
either paragraph (e)(3) or (k)(2)(i) or simply because the broker-
dealer established a new Special Reserve Bank Account). The staff
estimates that it would take a broker-dealer approximately 1 hour to
obtain this written notification from a bank regarding a Special
Reserve Bank Account because the language in these letters is largely
standardized. Therefore, Commission staff estimates that broker-dealers
will spend approximately 100 hours each year to obtain these written
notifications.
In addition, a broker-dealer must immediately notify the Commission
and its designated examining authority if it fails to make a required
deposit to its Special Reserve Bank Account. Commission staff estimates
that broker-dealers file approximately 33 such notices per year.
Broker-dealers would require approximately 30 minutes, on average, to
file such a notice. Therefore, Commission staff estimates that broker-
dealers would spend a total of
[[Page 2154]]
approximately 17 hours each year to comply with the notice requirement
of Rule 15c3-3.
Finally, a broker-dealer that effects transactions in SFPs for
customers also will have paperwork burdens associated with the
requirement in paragraph (o) of Rule 15c3-3 to make a record of each
change in account type.\1\ More specifically, a broker-dealer that
changes the type of account in which a customer's SFPs are held must
create a record of each change in account type that includes the name
of the customer, the account number, the date the broker-dealer
received the customer's request to change the account type, and the
date the change in account type took place. As of December 31, 2009,
broker-dealers that were also registered as futures commission
merchants reported that they maintained 35,242,468 customer accounts.
The staff estimates that 8% of these customers may engage in SFP
transactions (35,242,468 accounts x 8% = 2,819,397). Further, the staff
estimates that 20% per year may change account type. Thus, broker-
dealers may be required to create this record for up to 563,879
accounts (2,819,397 accounts x 20%). The staff believes that it will
take approximately 3 minutes to create each record.\2\ Thus, the total
annual burden associated with creating a record of change of account
type will be 28,194 hours (563,879 accounts x (3min/60min)).
---------------------------------------------------------------------------
\1\ 17 CFR 240.15c3-3(o)(3)(i).
\2\ In fact, the staff believes that most firms will have this
process automated. To the extent that no person need be involved in
the generation of this record, the burden will be very minimal.
---------------------------------------------------------------------------
Consequently, the staff estimates that the total annual burden
hours associated with Rule 15c3-3 would be approximately 65,091 hours
(36,780 hours + 100 hours + 17 hours + 28,194 hours).
The staff estimates that a broker-dealer would have (1) A financial
reporting manager make a record of its reserve computations and send
the required notices to the Commission, (2) an attorney obtain the
written notifications from banks where it has a Special Reserve Bank
Account to evidence bank's acknowledgement that assets deposited in the
Account are being held by the bank for the exclusive benefit of
customers, and (3) a compliance clerk create a record of each change in
account type. The staff estimates that the hourly rate of a financial
reporting manager and an attorney are $290 and $354, respectively,\3\
and the hourly rate of a compliance clerk is $67.\4\ Consequently, the
total cost of the above-described hour burden would be $12,595,528.\5\
---------------------------------------------------------------------------
\3\ The $290/hour figure for a financial reporting manager and
the $354/hour figure for an attorney are derived from SIFMA's
Management & Professional Salaries in the Securities Industry 2010,
as modified by Commission staff to account for an 1,800 hour work-
year and multiplied by 5.35 to account for bonuses, firm size,
employee benefits and overhead.
\4\ The $67/hour figure for a compliance clerk is derived from
SIFMA's Office Salaries in the Securities Industry 2010, modified by
Commission staff to account for an 1,800 hour work-year and
multiplied by 2.93 to account for bonuses, firm size, employee
benefits and overhead.
\5\ (((36,780 hours + 17 hours) x $290/hour) + (100 hours x
$354/hour) + (28,194 hours x $67/hour)).
---------------------------------------------------------------------------
In addition, a broker-dealer that effects transactions in SFPs for
customers also will have an annualized cost burden associated with the
requirements in paragraph (o) of Rule 15c3-3 to (1) provide each
customer that plans to effect SFP transactions with a disclosure
document containing certain information,\6\ and (2) send each SFP
customer notification of any change of account type.\7\ Approximately
8% of the accounts held by broker-dealers that are also registered as
FCMs, or 2,819,397 accounts, may engage in SFP transactions. The staff
estimates that the cost of printing and sending each disclosure
document will be approximately $.15 per document sent.\8\ Thus, the
staff estimates that the cost of printing and sending disclosure
documents would be approximately $422,910 (2,819,397 accounts x $.15).
In addition, approximately 563,879 accounts (2,819,397 accounts x 20%)
may change account type per year requiring that broker-dealers provide
notification to those customers. The staff estimates that the cost of
sending this notification to customers will be about $84,582 (563,879
accounts x $.15). Consequently, the staff estimates that the total
annual cost associated with Rule 15c3-3 would be $507,492 ($422,910 +
$84,583).
---------------------------------------------------------------------------
\6\ 17 CFR 240.15c3-3(o)(2).
\7\ 17 CFR 240.15c3-3(o)(3)(ii).
\8\ Based on past conversations with industry representatives
regarding other rule changes as adjusted to account for inflation
and increased postage costs.
---------------------------------------------------------------------------
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 shall
have practical utility; (b) the accuracy of the agency's estimate of
the burden of the proposed collection of information; (c) ways to
enhance the quality, utility, and clarity of the information to be
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.
Please direct your written comments to: Thomas Bayer, Chief
Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 6432 General Green Way, Alexandria, Virginia 22312 or
send an e-mail to: PRA_Mailbox@sec.gov.
Dated: January 6, 2011.
Elizabeth M. Murphy,
Secretary.
[FR Doc. 2011-475 Filed 1-11-11; 8:45 am]
BILLING CODE 8011-01-P
