Submission for OMB Review; Comment Request, 15008-15009 [2011-6316]

Download as PDF Emcdonald on DSK2BSOYB1PROD with NOTICES 15008 Federal Register / Vol. 76, No. 53 / Friday, March 18, 2011 / Notices Commission. Paragraph (d)(3) of the rule provides an exemption from this requirement for any loan or advance of credit to, or acquisition of securities or other property of, a small business concern, or any agreement to do any of the foregoing (‘‘investments’’) made by a small business investment company (‘‘SBIC’’) and an affiliated bank, provided that reports about the investments are made on forms the Commission may prescribe. Rule 17d–2 (17 CFR 270.17d–2) designates Form N– 17D–1 (17 CFR 274.00) (‘‘form’’) as the form for reports required by rule 17d– 1. SBICs and their affiliated banks use form N–17D–1 to report any contemporaneous investments in a small business concern. The form provides shareholders and persons seeking to make an informed decision about investing in an SBIC an opportunity to learn about transactions of the SBIC that have the potential for self dealing and other forms of overreaching by affiliated persons at the expense of shareholders. Form N–17D–1 requires SBICs and their affiliated banks to report identifying information about the small business concern and the affiliated bank. The report must include, among other things, the SBIC’s and affiliated bank’s outstanding investments in the small business concern, the use of the proceeds of the investments made during the reporting period, any changes in the nature and amount of the affiliated bank’s investment, the name of any affiliated person of the SBIC or the affiliated bank (or any affiliated person of the affiliated person of the SBIC or the affiliated bank) who has any interest in the transactions, the basis of the affiliation, the nature of the interest, and the consideration the affiliated person has received or will receive. Up to three SBICs may file the form in any year.1 The Commission estimates the burden of filling out the form is approximately one hour per response and would likely be completed by an accountant or other professional. Based on past filings, the Commission estimates that no more than one SBIC is likely to use the form each year. Most of the information requested on the form should be readily available to the SBIC or the affiliated bank in records kept in the ordinary course of business, or with respect to the SBIC, pursuant to the recordkeeping requirements under the Act. Commission staff estimates that it should take approximately one hour for an accountant or other professional to 1 As of February 4, 2011, three SBICs were registered with the Commission. VerDate Mar<15>2010 18:30 Mar 17, 2011 Jkt 223001 complete the form.2 The estimated total annual burden of filling out the form is 1 hour, at an estimated total annual cost of $198.3 The Commission will not keep responses on Form N–17D–1 confidential. The estimate of average burden hours is made solely for the purposes of the Paperwork Reduction Act, and is not derived from a comprehensive or even a representative survey or study of the costs of Commission rules. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number. Written comments are invited on: (a) Whether the collection of information is necessary for the proper performance of the functions of the Commission, including whether the information has practical utility; (b) the accuracy of the Commission’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. 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, VA 22312; or send an e-mail to: PRA_Mailbox@sec.gov. Dated: March 15, 2011. Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–6362 Filed 3–17–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange 2 This estimate of hours is based on past conversations with representatives of SBICs and accountants that have filed the form. 3 Commission staff estimates that the annual burden would be incurred by a senior accountant with an average hourly wage rate of $198 per hour. See Securities Industry and Financial Markets Association, Report on Management and Professional Earnings in the Securities Industry 2010, modified to account for an 1,800-hour work year and multiplied by 5.35 to account for bonuses, firm size, employee benefits and overhead. PO 00000 Frm 00115 Fmt 4703 Sfmt 4703 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’’) has submitted to the Office of Management and Budget a request for approval of extension of the previously approved 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.). Rule 15c3–3 requires that a brokerdealer that hold 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 only applies to broker-dealers that sell securities futures products (‘‘SFP’’) to customers, requires that such brokerdealers provide certain notifications to 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 E:\FR\FM\18MRN1.SGM 18MRN1 Emcdonald on DSK2BSOYB1PROD with NOTICES Federal Register / Vol. 76, No. 53 / Friday, March 18, 2011 / Notices 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 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 1 17 CFR 240.15c3–3(o)(3)(i). VerDate Mar<15>2010 18:30 Mar 17, 2011 Jkt 223001 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). 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,3 and (2) send each SFP customer notification of any change of account type.4 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.5 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). Records required to be created and notices required to be filed with the Commission pursuant to Rule 15c3–3 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. 3 17 CFR 240.15c3–3(o)(2). 4 17 CFR 240.15c3–3(o)(3)(ii). 5 Based on past conversations with industry representatives regarding other rule changes as adjusted to account for inflation and increased postage costs. PO 00000 Frm 00116 Fmt 4703 Sfmt 4703 15009 must be maintained in accordance with Rule 17a–4 (17 CFR 240.17a–4). The collection of information is mandatory and the information required to be provided to the Commission pursuant to these Rules are deemed confidential, notwithstanding any other provision of law under Section 24(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78x(b)) and Section 552(b)(3)(B) of the Freedom of Information Act (5 U.S.C. 552(b)(3)(B)). An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid control number. The public may view the background documentation for this information collection at the following Web site, http://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 e-mail to: Shagufta_Ahmed@omb.eop.gov; and (ii) Thomas Bayer, Chief Information Officer, Securities and Exchange Commission, c/o Remi Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312 or send an e-mail to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB within 30 days of this notice. Dated: March 14, 2011. Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–6316 Filed 3–17–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION Submission for OMB Review; Comment Request Upon Written Request, Copies Available From: Securities and Exchange Commission, Office of Investor Education and Advocacy, Washington, DC 20549. 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 (44 U.S.C. 3501 et seq.), the Securities and Exchange Commission (‘‘Commission’’) has submitted to the Office of Management and Budget a request for extension of the previously approved collection of information discussed below. E:\FR\FM\18MRN1.SGM 18MRN1

Agencies

[Federal Register Volume 76, Number 53 (Friday, March 18, 2011)]
[Notices]
[Pages 15008-15009]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-6316]


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SECURITIES AND EXCHANGE COMMISSION


Submission for OMB Review; 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'') has submitted to the Office of Management and Budget a 
request for approval of extension of the previously approved 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.).
    Rule 15c3-3 requires that a broker-dealer that hold 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 only 
applies 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

[[Page 15009]]

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 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).
    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,\3\ and (2) send each SFP 
customer notification of any change of account type.\4\ 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.\5\ 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).
---------------------------------------------------------------------------

    \3\ 17 CFR 240.15c3-3(o)(2).
    \4\ 17 CFR 240.15c3-3(o)(3)(ii).
    \5\ Based on past conversations with industry representatives 
regarding other rule changes as adjusted to account for inflation 
and increased postage costs.
---------------------------------------------------------------------------

    Records required to be created and notices required to be filed 
with the Commission pursuant to Rule 15c3-3 must be maintained in 
accordance with Rule 17a-4 (17 CFR 240.17a-4). The collection of 
information is mandatory and the information required to be provided to 
the Commission pursuant to these Rules are deemed confidential, 
notwithstanding any other provision of law under Section 24(b) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78x(b)) and Section 
552(b)(3)(B) of the Freedom of Information Act (5 U.S.C. 552(b)(3)(B)).
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid control number.
    The public may view the background documentation for this 
information collection at the following Web site, http://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 e-
mail to: Shagufta_Ahmed@omb.eop.gov; and (ii) Thomas Bayer, Chief 
Information Officer, Securities and Exchange Commission, c/o Remi 
Pavlik-Simon, 6432 General Green Way, Alexandria, VA 22312 or send an 
e-mail to: PRA_Mailbox@sec.gov. Comments must be submitted to OMB 
within 30 days of this notice.

    Dated: March 14, 2011.
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-6316 Filed 3-17-11; 8:45 am]
BILLING CODE 8011-01-P