Proposed Collection; Comment Request, 15039-15041 [2015-06358]
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Federal Register / Vol. 80, No. 54 / Friday, March 20, 2015 / Notices
Agency name
Authorization
No.
Organization name
Office of the Attorney General .......
Bureau of Public Affairs .................
Department of Transportation .........
Position title
Confidential Assistant .....................
Supervisory Public Affairs Specialist.
Speechwriter ...................................
Office of the Secretary (Public Affairs).
Authority: 5 U.S.C. 3301 and 3302; E.O.
10577, 3 CFR, 1954–1958 Comp., p. 218.
By direction of the Commission.
Shoshana M. Grove,
Secretary.
U.S. Office of Personnel Management.
Katherine Archuleta,
Director.
[FR Doc. 2015–06506 Filed 3–18–15; 11:15 am]
BILLING CODE 7710–FW–P
[FR Doc. 2015–06407 Filed 3–19–15; 8:45 am]
BILLING CODE 6325–39–P
SECURITIES AND EXCHANGE
COMMISSION
POSTAL REGULATORY COMMISSION
Sunshine Act Meetings
TIME AND DATE:
March 30, 2015, at 11
a.m.
Commission hearing room, 901
New York Avenue NW., Suite 200,
Washington, DC 20268–0001.
STATUS: The Postal Regulatory
Commission will hold a public meeting
to discuss the agenda items outlined
below. Part of the meeting will be open
to the public as well as audiocast, and
the audiocast may be accessed via the
Commission’s Web site at https://
www.prc.gov. Part of the meeting will be
closed.
MATTERS TO BE CONSIDERED: The agenda
for the Commission’s March 30, 2015
meeting includes the items identified
below.
PORTIONS OPEN TO THE PUBLIC:
1. Report from the Office of Public
Affairs and Government Relations.
2. Report from the Office of General
Counsel.
3. Report from the Office of
Accountability and Compliance.
PORTIONS CLOSED TO THE PUBLIC:
4. Discussion of pending litigation.
CONTACT PERSON FOR MORE INFORMATION:
David A. Trissell, General Counsel,
Postal Regulatory Commission, 901 New
York Avenue NW., Suite 200,
Washington, DC 20268–0001, at 202–
789–6820 (for agenda-related inquiries)
and Shoshana M. Grove, Secretary of the
Commission, at 202–789–6800 or
shoshana.grove@prc.gov (for inquiries
related to meeting location, changes in
date or time of the meeting, access for
handicapped or disabled persons, the
audiocast, or similar matters). The
Commission’s Web site may also
provide information on changes in the
date or time of the meeting.
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PLACE:
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Proposed Collection; Comment
Request
Upon Written Request Copies Available
From: U.S. Securities and Exchange
Commission, Office of FOIA Services,
100 F Street NE., Washington, DC
20549–2736.
Extension:
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’’) is soliciting comments
on the existing 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
Commission plans to submit this
existing collection of information to the
Office of Management and Budget
(‘‘OMB’’) for extension and approval.
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)).
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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
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
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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15040
Federal Register / Vol. 80, No. 54 / Friday, March 20, 2015 / Notices
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
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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
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
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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
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).
Written comments are invited on: (a)
Whether the proposed collection of
information is necessary for the proper
performance of the functions of the
Commission, including whether the
information shall have practical utility;
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(b) the accuracy of the Commission’s
estimate of the burden of the proposed
collection of information; (c) ways to
enhance the quality, utility, and clarity
of the information on respondents; 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.
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.
Please direct your written comments
to: Pamela C. Dyson, Director/Chief
Information Officer, Securities and
Exchange Commission, c/o Remi PavlikSimon, 100 F Street NE., Washington,
DC 20549 or send an email to: PRA_
Mailbox@sec.gov.
Dated: March 16, 2015.
Brent J. Fields,
Secretary.
[FR Doc. 2015–06358 Filed 3–19–15; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–74512; File No. SR–FINRA–
2015–005]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Extend the Expiration
Date of the Refund Program Under
FINRA Rule 3110.15 (Temporary
Program To Address Underreported
Form U4 Information)
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March 16, 2015.
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’) 1 and Rule 19b–4 thereunder,2
notice is hereby given that on March 3,
2015, Financial Industry Regulatory
Authority, Inc. (‘‘FINRA’’) filed with the
Securities and Exchange Commission
(‘‘SEC’’ or ‘‘Commission’’) the proposed
rule change as described in Items I, II,
and III below, which Items have been
prepared by FINRA. FINRA has
designated the proposed rule change as
constituting a ‘‘non-controversial’’ rule
change under paragraph (f)(6) of Rule
19b–4 under the Act,3 which renders
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 17 CFR 240.19b–4(f)(6).
2 17
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20:14 Mar 19, 2015
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the proposal effective upon receipt of
this filing by the Commission. The
Commission is publishing this notice to
solicit comments on the proposed rule
change from interested persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
FINRA is proposing to amend FINRA
Rule 3110.15 (Temporary Program to
Address Underreported Form U4
Information) to extend the expiration
date of the refund program under that
rule, which currently is July 31, 2015,
until December 1, 2015.
The text of the proposed rule change
is available on FINRA’s Web site at
https://www.finra.org, at the principal
office of FINRA and at the
Commission’s Public Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission,
FINRA included statements concerning
the purpose of and basis for the
proposed rule change and discussed any
comments it received on the proposed
rule change. The text of these statements
may be examined at the places specified
in Item IV below. FINRA has prepared
summaries, set forth in sections A, B,
and C below, of the most significant
aspects of such statements.
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
1. Purpose
On December 30, 2014, the SEC
approved FINRA Rule 3110.15, which
establishes a temporary refund program
whereby FINRA will issue a refund to
members of Late Disclosure Fees
assessed for the late filing of responses
to Question 14M (relating to unsatisfied
judgments or liens) on the Form U4
(Uniform Application for Securities
Industry Registration or Transfer),
subject to specified conditions.4 The
refund program under FINRA Rule
3110.15 is intended to incentivize
members to disclose underreported
information and save FINRA the time
and regulatory resources expended in
contacting firms and requesting that
such information be reported. The
refund program has a retroactive
effective date of April 24, 2014,5 and it
4 See Securities Exchange Act Release No. 73966
(December 30, 2014), 80 FR 546 (January 6, 2015)
(Order Approving File No. SR–FINRA–2014–038).
5 See FINRA Board Approves Amendment to
Supervision Rule Requiring Firms to Conduct
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15041
is currently scheduled to expire on July
31, 2015. FINRA understands that,
following SEC approval of the rule,
some firms have undertaken a wholesale
review of their registrants to identify
judgments and liens that may have been
unreported, including those that meet
the parameters of the refund program.
Based on FINRA’s experience to date,
FINRA believes that a four-month
extension of the program will more
effectively achieve its intended purpose.
Therefore, FINRA is proposing to amend
FINRA Rule 3110.15 to extend the
sunset date of the refund program until
December 1, 2015, which will give firms
adequate time to identify and report
information to FINRA. FINRA is not
proposing any changes to the other
parameters of the refund program.
As proposed, FINRA Rule 3110.15
will provide that FINRA will issue a
refund to firms of Late Disclosure Fees
assessed for the late filing of responses
to Form U4 Question 14M (unsatisfied
judgments or liens) if the Form U4
amendment is filed between April 24,
2014, and December 1, 2015, and one of
the following conditions is met:
(1) The judgment or lien has been
satisfied, and at the time it was
unsatisfied, it was under $5,000, and the
date the judgment or lien was filed with
a court (as reported on Form U4
Judgment/Lien DRP, Question 4A) was
on or before August 13, 2012; 6 or
(2) the unsatisfied judgment or lien
was satisfied within 30 days after the
individual learned of the judgment or
lien (as reported on Form U4 Judgment/
Lien DRP, Question 4.B.).
The refund program will continue to
have a retroactive effective date of April
24, 2014, but it will automatically
sunset on December 1, 2015, as
proposed. Thus, firms will not be able
to obtain a refund pursuant to the
parameters established under the
program after December 1, 2015. While
the program is in effect, FINRA will
initially assess firms a Late Disclosure
Fee and subsequently refund the fee in
the firm’s FINRA Flex-Funding Account
if the firm can establish, or if FINRA
otherwise determines, that the
conditions of the program have been
satisfied.
FINRA has filed the proposed rule
change for immediate effectiveness. The
implementation date of the proposed
Background Checks on Registration Applicants,
FINRA News Release, April 24, 2014, available at
https://www.finra.org/Newsroom/NewsReleases/
2014/P493588.
6 See Information Notice August 17, 2012 (Late
Disclosure Fee Related to Reporting of Judgment/
Lien Events), available at https://www.finra.org/web/
groups/industry/@ip/@reg/@notice/documents/
notices/p152106.pdf.
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]]>Agencies
[Federal Register Volume 80, Number 54 (Friday, March 20, 2015)]
[Notices]
[Pages 15039-15041]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06358]
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SECURITIES AND EXCHANGE COMMISSION
Proposed Collection; Comment Request
Upon Written Request Copies Available From: U.S. Securities and
Exchange Commission, Office of FOIA Services, 100 F Street NE.,
Washington, DC 20549-2736.
Extension:
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'') is soliciting comments on the existing
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 Commission plans to submit this existing
collection of information to the Office of Management and Budget
(``OMB'') for extension and approval.
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
[[Page 15040]]
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 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).
Written comments are invited on: (a) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the Commission, including whether the information
shall have practical utility;
[[Page 15041]]
(b) the accuracy of the Commission's estimate of the burden of the
proposed collection of information; (c) ways to enhance the quality,
utility, and clarity of the information on respondents; 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.
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.
Please direct your written comments to: Pamela C. Dyson, Director/
Chief Information Officer, Securities and Exchange Commission, c/o Remi
Pavlik-Simon, 100 F Street NE., Washington, DC 20549 or send an email
to: PRA_Mailbox@sec.gov.
Dated: March 16, 2015.
Brent J. Fields,
Secretary.
[FR Doc. 2015-06358 Filed 3-19-15; 8:45 am]
BILLING CODE 8011-01-P
