Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices 2153 

1This 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. 

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. 

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 

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 

mstockstill on DSKH9S0YB1PROD with NOTICES

2154 Federal Register / Vol. 76, No. 8 / Wednesday, January 12, 2011 / Notices 

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. 

3The $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. 

4The $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). 

8Based on past conversations with industry 

representatives regarding other rule changes as 

adjusted to account for inflation and increased 

postage costs. 

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). 

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 

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 

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

mstockstill on DSKH9S0YB1PROD with NOTICES